Opinion ID: 500031
Heading Depth: 3
Heading Rank: 2

Heading: Impropriety of the October 22, 1980 Interim Implementing Agreement

Text: 102 The October 22, 1980 implementing agreement was negotiated by representatives of CNW employees in contravention of the terms and the purpose of the March 4th Agreement and it was thus hopelessly flawed. 103 The March 4th Agreement was designed to fill a practical necessity by easing the potentially troubled transition period during which the CNW acquired the Rock Island Railroad. The purpose of the March 4th Agreement was to provide the CNW labor peace in exchange for accommodation in terms of jobs and seniority for the former employees of the Rock Island Railroad. Thus, the terms of the March 4th Agreement were not a gratuitous gesture by the CNW to the former Rock Island employees, but represented bargained-for consideration in the truest sense of the term. 104 When a highly unionized rail carrier takes over the trackage of another highly unionized carrier, whether by merger or acquisition, unless assurances are made to the employees of both acquiring and acquired railroads, labor dislocation and strife is likely to be bitter and endemic. First, the employees of the acquired company face the personally devastating prospect of losing long-standing valued seniority rights and, more importantly, of losing jobs. In such a period, displaced employees are likely to force the representatives of their local and international unions into using pressure tactics to force the acquiring company into some sort of an accommodation, both in terms of rights to hire and job seniority. The acquiring companies are very susceptible to this sort of pressure, because they themselves are highly unionized--generally with the same unions as the acquired company. In addition, they are dependent on the skilled labor force which the union dominates. 105 The complication, however, does not end here. On the other side of the coin, the incumbent employees of the acquiring companies are likely to feel threatened by the hiring of new employees with advanced seniority rights and are likely to demand some sort of firm assurance, both in terms of their job status and vested seniority rights. 106 To settle these conflicts, a common and well-established practice in acquisitions or mergers is to engage in some sort of dovetailing of seniority. See Humphrey v. Moore, 375 U.S. 335, 347, 84 S.Ct. 363, 370, 11 L.Ed.2d 370 (1964) (The integration or dovetailing of seniority is a familiar and frequently equitable solution to the inevitably conflicting interests which arise in the wake of a merger or an absorption.). Indeed, federal cases deciding seniority issues in acquisitions and mergers subject to the Railway Labor Act reveal that some sort of dovetailing of seniority is almost standard practice. 12 107 In terms of seniority allocation for former Rock Island employees hired by acquiring railroads, section 9 of the March 4th Agreement, in highly ambiguous terms, sets forth procedures to determine job status. Specifically, it states: 108 [A]greements will be reached on each purchasing carrier concerning the manner in which seniority will be allocated in filling additional job assignments, between the purchasing carrier's employees and the bankrupt carrier employees hired by the purchasing carrier. 109 March 4th Agreement at 7. 110 Carefully parsing the words of this phrase, it is difficult to determine which parties are to negotiate this agreement. Upon analysis, however, it is clear that any correct interpretation must include the representatives of the former Rock Island employees in these negotiations. 111 One construction would have this phrase mean that an agreement would be reached at a future time with regard to seniority allocation as amongst the combined groups of preacquisition CNW employees and former employees of the Rock Island recently employed by the CNW. This construction would not in any way specify the parties to the potential agreement and would thus leave the selection of these parties completely within the control of the CNW. Such an utter abdication of power over selecting the parties to determine seniority, however, would result in the complete loss of control over seniority allocation and thus runs contrary to the purposes of the Agreement, i.e., to protect the interests of the former Rock Island employees and to avoid labor strife in the critical transition period. Moreover, if the purpose of the agreement was to give the company the power to determine seniority, it is likely that the agreement would simply have said this. 112 A second construction, implicitly urged by appellees, would have this clause create a procedure whereby seniority agreements would be reached between the CNW and representatives of the CNW's unions. The text, however, does not support such a construction. Further, the March 4th Agreement was designed to protect the seniority rights of former Rock Island employees. Yet, it is vital to realize that there is no group that would be less inclined to protect the seniority rights of the Rock Island employees than the representative of the CNW employees. The reason is simple. Any seniority credit given Rock Island employees for work performed while with the Rock Island would adversely affect the seniority rights of the employees of the CNW. Given this, the representatives of the CNW unions could be expected to favor the interests of the pre-acquisition employees, utterly frustrating the purposes of the agreement. Thus, this second construction could not possibly be correct. 113 The third and correct construction would require the implementing agreements be reached with the active and significant participation of the representatives of the former Rock Island employees. Strong support for this construction is found in the March 4th Agreement's purpose, to protect the interests of former Rock Island employees, in the union's constitution, and in Tucumcari, which, in delineating internal UTU policy, declared that all employee representatives should participate in the negotiation of implementing agreements.