Opinion ID: 500031
Heading Depth: 1
Heading Rank: 4

Heading: remedies available to appellants

Text: 75 Given the fact that the appellants' substantive claims cannot properly be brought in federal court, we now turn to the task of determining what remedies, if any, remain available to them. 76 For purposes of resolving this question, the 158 individual claimants involved in the present action are best divided into three categories: March 4th Agreement appellants, non-hire appellants, and new-hire appellants. 77
78 The March 4th Agreement appellants are thirty-three individuals hired by the CNW who claim they were not given adequate seniority under the March 4th Agreement. This group can be subdivided into two classes: the ground service employees and the engine service employees. 79
80 Nine of the thirty-three March 4th appellants were former ground service employees of Rock Island represented by the UTU. These employees were subject to the October 22, 1980 interim implementing agreement. They claimed that this implementing agreement was improper for several reasons and went to arbitration to protest its terms. Their claims were rejected by the arbitrator. 81
82 Twenty-four of the March 4th appellants were former engine service employees represented by both the UTU and the BLE. These employees were subject to two February 16, 1982 implementing agreements reached between the CNW and their respective unions. These employees, like the ground service employees, claim that the implementing agreements governing their seniority were improper. These appellants, however, did not take their protests to arbitration.
83 This group comprises eighty-one employees who applied for employment with the CNW in 1980 or 1981 for available positions but were not hired. Instead, the CNW hired persons without prior service on either the Rock Island or the CNW. This group claims they had a right to be hired both under the March 4th Agreement and section 105 of RITEA, 45 U.S.C. Sec. 1004.3. The New-Hire Appellants 84 This group is made up of forty-four former Rock Island employees taken on by the CNW as new hires for work the CNW claims did not arise out of the acquisition of the Rock Island. These appellants claim a deprivation of seniority rights under the terms of the March 4th Agreement. 85
86 The March 4th ground service employees contend that the arbitration proceeding of May 20, 1983, was improper and must be vacated. We agree.
87 While labor arbitrations are entitled to great deference, if such arbitrations are so tainted with unfair or fraudulent representation that they seriously undermine the integrity of the arbitral process, they must be set aside. Hines v. Anchor Motor Freight, 424 U.S. 554, 567, 96 S.Ct. 1048, 1057, 47 L.Ed.2d 231 (1976). 11 In the present case, the arbitration concerning the ground service employees was clearly so tainted and must be vacated. 88 In order to establish unfair representation by a union, the claimants must show that the union's representation was perfunctory, arbitrary, discriminatory, or in bad faith. International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 47, 99 S.Ct. 2121, 2125, 60 L.Ed.2d 698 (1979). A union representing a majority bargaining coalition owes a strict supplementary duty of fair representation to the position of a minority group within the coalition with interests adverse to the majority. In Steele v. Louisville & Nashville R.R., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944), the Supreme Court held that the organization chosen to represent a craft is to represent all of its members, the majority as well as the minority and is to act for and not against those whom it represents. Id. at 202, 65 S.Ct. at 232. Further, in Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 909, 17 L.Ed.2d 842 (1967), the Court declared: 89 [T]he exclusive agent's statutory authority to represent all members of a designated unit includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct. 90 This duty to the interests of an adverse minority is perhaps most thoroughly delineated in the case of Jones v. Trans World Airlines, 495 F.2d 790 (2d Cir.1974). In Jones, the Second Circuit found a breach of the duty of fair representation by a union representing an adverse minority group sufficient cause to set aside the seniority provisions of a collective bargaining agreement. 91 In Jones, Trans World Airlines (TWA) entered into a collective bargaining agreement with the International Association of Machinists and Aerospace Workers International Union (IAM) in January of 1970. Prior to this time, certain employees titled passenger relations agents had not been asked to join a union and were not required to join a union under the union security clause in effect at that time. Moreover, prior to that time, the collective bargaining agreement provided that all employees would hold job seniority status as of the date of their job assignment. 92 Under the terms of the new agreement, the work of passenger relations agents was included within the jurisdiction of the IAM in the guards bargaining unit. TWA and IAM further agreed that the passenger relations employees would be treated as new hires for the purpose of seniority. The effect of this was to make any IAM members who wished to transfer to the job of passenger relations agent senior to all non-IAM employees who had previously held these positions, despite the fact that the old contract fixed seniority by the date of assignment to a given job classification. 93 In June of 1970, TWA announced that the passenger relations jobs were guard vacancies. Twelve members of the IAM guard unit bid for the jobs and were given seniority as of the date they assumed the duties of passenger relations agents, i.e. June 22, 1970. The rest of the jobs were filled by non-IAM workers who were then holding these positions. These workers were given seniority as of the dates they joined the union, generally sometime in July or August of 1970. When the new union members found out they had less seniority than the twelve newcomers to their department, they brought an action in district court claiming that the unions had unfairly represented them. The district court denied relief. 94 The Second Circuit reversed. The court found that the only characteristic that distinguished the new union members from the employees afforded greater seniority was the fact of union membership prior to the January 1970 collective bargaining agreement. The court termed this sort of discrimination in the negotiation of seniority arbitrary and invidious and found that such conduct violate[d] the unions' duty to represent fairly all members of the bargaining unit. Id. at 797. 95 The court declared that, while the standard for unfair representation generally involves arbitrary, perfunctory, or discriminatory conduct, the union must meet a higher standard when the interests of an adverse minority are affected. Specifically, the court said the union representative must provide substantive and procedural safeguards for the minority group. 96 [I]t is evident that a union may breach its duty of fair representation by actions other than those motivated by anti-minority animus. While it is true that situations in which a union violates its duty have been indentified by such phrases as hostile discrimination,    and arbitrary, discriminatory, or bad faith conduct,    these phrases do not delimit the specific categories of violations of the duty of fair representation. They only serve to emphasize that the union has broad discretion to adjust the demands of competing groups within its constituency as long as it does not act arbitrarily.    97 In the instant case, the IAM's duty to the appellants was broader than a mere duty not to negotiate the 1970 contract seniority provisions out of hostility toward them. The objective of the duty of fair representation is to provide substantive and procedural safeguards for minority members of the collective bargaining unit. 98 Id. at 798 (citations omitted and emphasis added). 99 The court then declared that the seniority of the former passenger relations employees should be determined as of the date of original job assignment. 100 In the present case, the union representatives of the CNW employees did not provide any substantive and procedural safeguards for minority members of the collective bargaining unit. Further, they failed to provide these safeguards in the face of both contractual guarantees to the contrary and repeated requests for proper process. Finally, the arbitration was tainted both because it was based on an improper implementing agreement and because it was conducted by the union in violation of its own constitution. 101
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.
114 The ground service employee arbitration was fundamentally improper, both because the arbitrator deferred to an invalid implementing agreement and because he was not provided with information vitally relevant to his decision. 115 The arbitrator clearly based his decision on the October 22, 1980 interim agreement. He declared, without support from the record or any coherent reason, that the Rock Island employees had sufficient participatory rights to ensure the implementing agreement was consistent with the March 4th Agreement. Further, he specifically deferred to the October 22, 1980 agreement, declaring both that it would be inappropriate to make a redetermination of seniority and that prior rights and dovetailing were not contemplated by the March 4th Agreement. 116 Next, the arbitrator made his decision without an understanding of the requirements of the union's constitution. To conform with the UTU constitution, the union should have entered the arbitration with a unified position and actively sought seniority for Rock Island employees. What happened in the ground service employees' arbitration, however, could not have been more different. The union allowed the claims of the CNW employees with regard to the allocation of seniority--a position contrary to its centrally determined seniority policy--to go unchallenged to the arbitrator. This impropriety strongly contributed to providing a legitimate forum to a position which it had previously determined illegitimate and which otherwise would probably not have prevailed.
117 In Jones, the Second Circuit found that the duty of fair representation had been violated when a union preferred long-term members' interests to those of new members. In some intuitive ways this line of conduct by the union might seem justifiable. It might be argued the union owed more loyalty to those long term members than to those employees not yet members of the union. Nevertheless, the court found this conduct to be arbitrary and invidious. Further, the court delineated a clear obligation to represent these future members and to assure them substantive and procedural safeguards in the contract talks. 118 The inherent force of Jones cuts powerfully in favor of the Rock Island appellants. First, the former Rock Island employees are in a stronger position to assert unfair representation than the non-union passenger relations agents in Jones. While, in a sense, both groups stood poised to become members of the group represented by their bargaining agent, the Rock Island employees were already members of an international charged with representing their interests. Thus, not only are the Rock Island employees owed the substantive and procedural guarantees mandated by Jones--protections which were clearly not provided--but additional protection arising from their membership in the international union. 119 In addition, the UTU in the present case offended in more grievous ways affirmative duties of fair representation clearly imposed upon them. The March 4th Agreement and Tucumcari required the participation of the former Rock Island employees in the negotiation of the implementing agreements. Moreover, the union's own constitution required a unified position at the arbitration. Finally, during the critical period of the transition, the UTU was actively closing down and consolidating its Rock Island union locals. This likely made it more difficult for the former Rock Island employees to understand and guard their rights and to determine whether their interests were being adequately protected by the CNW employees' representatives. 120 For the foregoing reasons, neither the arbitration nor the October 22, 1980 implementing agreement upon which it was based can be sustained. We, therefore, remand these cases to the district court with directions to enter an order vacating the ground service employees' arbitration. We further direct the district court to order the parties to renegotiate an implementing agreement in line with the requirements set forth in the March 4th Agreement. In these negotiations, the representatives of the Rock Island employees will participate in an active and significant manner. We leave it to the International to determine whether representatives of the former Rock Island employees will be necessary parties to the agreement, as its internal decision in Tucumcari strongly suggests, or whether they will be carefully consulted by the International prior to its negotiating the agreement. 121 Should the first course be chosen and the parties fail to reach a satisfactory agreement, the International shall represent both the CNW and former Rock Island employees in the arbitration that is to follow under the terms of the March 4th Agreement. Before the matter goes to arbitration, the International shall develop a unified position consistent with its constitution and internal decisions to assure adequate protection of the seniority interests of the former Rock Island employees. If the second course is chosen, the International shall similarly be directed by the district court to present a unified position consistent with its constitution and internal decisions. Again, should the parties fail to reach agreement, the International shall represent both the CNW and former Rock Island employees in line with a predetermined unified position.
122 The Newton engine service employees claim that the seniority they received under the implementing agreements of February 22, 1982, was inadequate under the terms of the March 4th Agreement. They, like the Newton ground service appellants, allege that those implementing agreements were hopelessly biased because former Rock Island employees had no role in securing them and because they were negotiated by those with interests adverse to their own. Because of this fundamental impropriety, we find the February 22, 1982 implementing agreements to be in contravention of the March 4th Agreement and, hence, invalid. 123 As in the case of the ground service employees, we remand these cases to the district court with directions to enter an order requiring the parties to renegotiate these agreements in accordance with the requirements of the March 4th Agreement. We direct that these agreements be negotiated in strict accordance with section IV(B)(4) of this opinion, with representatives of the Rock Island employees participating in an active and significant manner. Moreover, should the parties fail to reach agreement, subsequent arbitration of this matter shall also be governed by section IV(B)(4) of this opinion.

124 The appellants in this category are former Rock Island employees who claim a right to be hired under the March 4th Agreement and Section 105 of RITEA, 45 U.S.C. Sec. 1004. As discussed above, the March 4th Agreement provides a right of first hire in terms of work arising out of the acquisition of former Rock Island trackage. RITEA provides a sweeping right of first hire to any former Rock Island employee who is not less qualified than other applicants for any position not covered by an affirmative action plan. These appellants allege that the CNW hired a great number of new workers who were not former Rock Island employees in violation of RITEA. Further, they allege that many of these new workers were hired to work on the former trackage of the Rock Island, thus violating the March 4th Agreement. 125
126 The arbitration provision which governs the appellants' claim is 45 U.S.C. Sec. 797c(g). Subsection (f) of 45 U.S.C. Sec. 797c states: The provisions of this section shall cease to be effective on the expiration of the 6-year period beginning on August 13, 1981. Based upon this sunsetting provision, appellees argue that appellants have lost their right to arbitration. Appellants, on the other hand, contend that because the statutory subdivision containing the arbitration provision has lapsed, they now have a clear and unimpeded right to an action in federal court. The theories of both parties are incorrect. 127
128 Upon careful examination, it is clear that Congress did not intend to phase out arbitral redress for disputes involving preferential hiring under RITEA. When the evolving structure and purpose of 45 U.S.C. Sec. 797c is carefully examined, it is apparent that the sunsetting provision of that section was intended to eliminate the Central Register of Railroad Employment administered by the Railroad Retirement Board (RRB) and not to cut off the right to arbitration for disputes concerning preferential hiring. 13 129 45 U.S.C. Sec. 797 et seq., which corresponds to Title VII of the Northeast Rail Service Act of 1981, Pub.L. No. 97-35, 95 Stat. 643 (1981) (NRSA), was a part of the massive Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 357 (1981) (OBRA) designed, at least at the outset, to drastically reduce the size and commitments of the federal government. 130 Title VII, part of the effort to privatize the failing Conrail, allowed the railroad to end onerous protective obligations that had been established by Title V of the Rail Reorganization Act of 1973, Pub.L. No. 93-236, 87 Stat. 985 (1973). Specifically, Title VII allowed the railroad to terminate some employees or employee benefits in exchange for specified cash payments. 131 Part of the transition that was accomplished by Title VII involved the creation of a central register of displaced railroad employees. The register was to be of limited duration and was designed to assist employees in securing their preferential hiring rights. See NRSA Sec. 704, 45 U.S.C. Sec. 797c. As originally introduced in Congress, Sec. 797c contained only the provisions found in subsections now codified (a) through (f). See H.R. 3488, 97th Cong., 1st Sess. Sec. 303 (introduced May 5, 1981); S. 1377, 97th Cong., 1st Sess. Secs. 413-4 (introduced June 17, 1981). Subsections (a) through (e) required the RRB to maintain a central register of displaced railroad employees to facilitate their reemployment and to assist in the implementation of preferential hiring rights. Subsection (f) was the sunset provision which allowed the RRB to end the registration apparatus within a reasonable time after the employee terminations allowed by NRSA. 132 It is important to note that subsection (g) of Sec. 797c, the arbitration provision at the heart of the present controversy, was not a coherent part of the legislative scheme of the original Sec. 797c, but only a last minute afterthought added later in conference. See H.R.Conf.Rep. No. 97-208, 1st Sess., 913 (1981), U.S.Code Cong. & Admin.News 1981, p. 396. It must be remembered that OBRA itself has long been noted for the vast legislative confusion engendered and the significant number of drafting oversights and errors that occurred as it wended its way through the Congress. Given this background, it is likely that any implication that Congress intended the right to arbitration for preferential hiring to end with this sunsetting provision was inadvertent. 133 This likelihood of inadvertency becomes a certainty when one examines the internal structure of Title VII. Title VII addresses a broad range of issues affected by the NRSA. 14 With only a few exceptions, it subjects disputes concerning these various topics to resolution under Sec. 714, 45 U.S.C. Sec. 797m, which provides for arbitration by an adjustment board under Sec. 3 of the Railway Labor Act, 45 U.S.C. Sec. 153. Section 714 has no sunset provision. 134 The right to preferential hire was one of the few exceptions to arbitration under Sec. 797m, largely because the right to preferential hire was initially related to the central register maintained by the RRB. The only substantive difference between Sec. 797c(g), the arbitration provision at issue here, and Sec. 797m is that the former subjects the right to arbitration to a preliminary screening by the RRB, the board charged with maintaining the central register. The substantive arbitration of both types of disputes is eventually accomplished by an adjustment board under 45 U.S.C. Sec. 153. While the central register was in existence, it certainly made sense to subject preferential hiring claims to a preliminary screening by the RRB, which would be likely to have all the relevant information concerning these claims close at hand. Yet, the Congress could not have intended to cut off the right to arbitration completely to employees who had preferential hiring claims when the central register ceased to exist, particularly when arbitration was still available to those asserting grievances under almost all the other topic areas covered by Title VII. 135 We, therefore, find, as a matter of statutory interpretation, that the sunsetting provision of 45 U.S.C. Sec. 797c only applies to the maintenance of the Central Register of Employees required under Title VII and that claims involving preferential hiring of former Rock Island employees with the CNW remain subject to arbitration by an adjustment board under Sec. 3 of the Railway Labor Act, 45 U.S.C. Sec. 153.4. Conclusion 136
137 Given the fact that the right to arbitration under 45 U.S.C. Sec. 797c(g) still is open to appellants, we remand to the district court with directions to send the disputes under RITEA to be resolved by an adjustment board under section 3 of the Railway Labor Act. Moreover, the adjustment board should, at the same time, consider appellants' claims arising under the March 4th Agreement. 138
139 Because neither RITEA nor the March 4th Agreement has any specific period of limitations, we leave to the arbitrator the question of whether the claims of the non-hire appellants are barred by laches. 140 In deciding this issue, the arbitrator is directed to take into account the following factors. First, the arbitrator should consider the delay in seeking redress caused by the closing of the Rock Island locals by various internationals. In this regard, the arbitrator should determine whether the former Rock Island employees were adequately informed of their rights under RITEA and the March 4th Agreement. Specifically, he should determine whether there were false assurances made by union representatives to the effect that Rock Island grievances would be redressed and the effect such assurances might have had in delaying action by the Rock Island employees. 141 Second, the arbitrator should take into account the cumulative effect of the serious unfair representation by the internationals in terms of the March 4th appellants. Not only did the unions act unfairly in the negotiation of the implementation agreements but they also did not properly represent the former Rock Island employees in the arbitration. This unfairness by the internationals to the March 4th appellants may have convinced the non-hire appellants that it would be futile to process their claims through conventional channels because they believed they could not rely on their union representatives to adequately represent their interests.
142 A fourth group of claimants are the new-hire appellants. These appellants were hired by the Rock Island after its acquisition by the CNW. They received no seniority and contend that their rights were violated under the March 4th Agreement. The CNW contends that the jobs the new hire appellants received did not arise out of the work related to the Rock Island acquisition, and thus they were not deserving of any seniority under the March 4th Agreement. Clearly, if the work did not arise directly from the Rock Island acquisition, the CNW is correct. 143 These new-hire appellants have the right to have their claims submitted to a neutral arbitrator to determine whether the jobs they received arose from the acquisition and, if they did, what seniority rights are due these appellants. Appellants' claims are, of course, subject to the defense of laches. In determining whether appellants' claims are barred by laches, the arbitrator should take into account all those factors listed in section IV(D)(4)(b) of this opinion.