Opinion ID: 510613
Heading Depth: 2
Heading Rank: 4

Heading: Reconciling Labor Policies and Shipping Policies

Text: 139 Passing the claim that the MLAA bars consideration of labor matters under the shipping laws, the Commission's alternative argument is that, under those laws, labor policies may be considered only in fashioning an appropriate remedy for practices that cannot be justified by reference to traditional transportation factors. In other words, labor policies are relevant not to the liability, but only to the remedial, phase of the proceeding. Before turning to its merits, we address briefly the standard under which we review this interpretation of the shipping laws.
140 The applicable provisions of the shipping laws make no mention of labor policies; nor does any party maintain that the legislative history of these statutes provides a clear indication of a congressional purpose with respect to the question we must presently answer. Absent some authoritative guidance from Congress, or another controlling consideration, it would seem that our task under the second step in Chevron is to decide only whether the Commission's interpretation of the statutes it is entrusted to administer is a permissible or reasonable one. 141 The petitioners argue that the deferential test of Chevron does not apply, however, because the question presented is a pure question of law. They further contend that the requirements of the shipping laws must be reconciled with the policies of the labor laws, and that the process of doing so is peculiarly a judicial function, since it requires the weighing and harmonizing of different congressional goals and policies. In their view, we must review the Commission's interpretation of the shipping laws de novo. 142 We do not disagree that the Commission should not trench unnecessarily upon the policies underlying the federal labor laws. When the purposes of the shipping laws it administers can otherwise be accomplished, the Commission must take care not to create tension between the labor and shipping law obligations of carriers. See Burlington Truck Lines v. United States, 371 U.S. 156, 172-74, 83 S.Ct. 239, 247-48, 9 L.Ed.2d 207 (1962). It does not follow, however, that in order to ensure against that possibility we must review the Commission's interpretation of its organic legislation under a more stringent standard of review than is mandated by Chevron. 143 Whatever weight labor policies must be given in this case, the matter under review remains the Commission's application of the shipping laws to the Rules, not a pronouncement on the validity of the Rules under the labor statutes. Although the manner in which the Commission has interpreted the shipping laws may have important consequences for the collective bargaining relationship between the ILA and the carriers, so too may the interpretation given a myriad of laws by many different agencies concerned with such matters as pensions, taxation of benefits, antitrust policy, and so on. In this case, the legality of the Rules as a matter of labor law has been established conclusively by the Supreme Court; there may be many other laws that the Rules, with equal certainty, do not offend. Our concern, and that of the Commission before us, is solely with the requirements of the shipping laws, and such allowance, if any, as the shipping laws make to accommodate national labor policy. 144 Thus, in this case as in any other, the shipping laws constitute[ ] the immediate frame of reference within which the Commission operates ... and the policies expressed in [them] must be the basic determinants of its action. Denver & R.G.W.R. Co. v. United States, 387 U.S. 485, 493-94, 87 S.Ct. 1754, 1760, 18 L.Ed.2d 905 (1967) (quoting McLean Trucking Co. v. United States, 321 U.S. 67, 80, 64 S.Ct. 370, 377, 88 L.Ed. 544 (1944)). And [i]t is the Commission that in the first instance must determine whether, because of certain compelling considerations, a carrier is relieved of its usual statutory duty.... See Local 1976, United Bhd. of Carpenters and Joiners, 357 U.S. 93, 109, 78 S.Ct. 1011, 1021, 2 L.Ed.2d 1186 (1958) (hereinafter Sand Door ). That being the case, and because the Commission may not in any event abandon an independent inquiry into the requirements of its own statute and mechanically accept standards elaborated by another agency under a different statute for wholly different purposes, id. at 111, 78 S.Ct. at 1022, our review remains a matter of checking the Commission against the terms of the shipping laws. This is precisely the type of appellate exercise governed by Chevron; our review must be correlatively deferential. 10 145 Congress has unmistakeably delegated to the Commission initial authority to resolve the kind of issue before us today, subject to our review for fidelity to the broad purposes of the shipping laws. For, as we have seen, the Rules at issue must be published in a signatory carrier's tariff, and thus, fall within the jurisdiction of the Commission pursuant to section 5 of the MLAA. The Commission has applied the laws it administers to the Rules, and our only task is to determine whether, in doing so, the Commission has interpreted the statute in a manner not in derogation of the Congressional policies it expresses. It matters not whether the issue before us can be characterized as a pure question of law or something else; Congress has not spoken to the question, and since it can fairly be characterized as falling within the authority Congress has delegated to the Commission, we are simply not at liberty to substitute our judgment for that of the agency that must administer these laws on a day-to-day basis. United Food and Commercial Workers Union, Local 23, 108 S.Ct. at 426-27 (Scalia, J., concurring); cf. Burlington Truck Lines, 371 U.S. at 169, 83 S.Ct. at 246. Reasonableness, therefore, is the measure of our review. 146 Nonetheless, this case does differ in one respect from the generality of cases in which we are called upon to review an agency's interpretation of a statute pursuant to Chevron. The FMC has not been commissioned to effectuate the policies of the [shipping laws] so single-mindedly that it may wholly ignore other and equally important Congressional objectives. Southern Steamship Co. v. NLRB, 316 U.S. 31, 47, 62 S.Ct. 886, 894, 86 L.Ed. 1246 (1942). As the Supreme Court has repeatedly emphasized, [f]requently the entire scope of Congressional purpose calls for careful accommodation of one statutory scheme to another, and it is not too much to demand of an administrative body that it undertake this accommodation without excessive emphasis upon its immediate task. Id.; see FTC v. A.P.W. Paper Co., 328 U.S. 193, 202, 66 S.Ct. 932, 936, 90 L.Ed. 1165 (1946); McLean Trucking, 321 U.S. at 80, 64 S.Ct. at 377. 147 Therefore, for its interpretation of the shipping laws to be considered permissible or reasonable, the Commission must adequately explain not only why its interpretation is consistent with the shipping laws, but also why it accomplishes the accommodation required (or, alternatively, why no accommodation is possible), and why any alternative, more accommodating interpretations were rejected. 148 In order to do this, the Commission must identify the relevant labor policies that are to be accommodated, a task quite clearly beyond the Commission's claim of expertise and outside Chevron 's rationale for deferential review. Hence, we give no special deference to its interpretation and identification of those policies. See Sand Door, 357 U.S. at 108-10, 78 S.Ct. at 1020-21; Department of the Treasury v. Federal Labor Relations Authority, 837 F.2d 1163, 1167 (D.C.Cir.1988) ([W]hen an agency interprets a statute other than that which it has been entrusted to administer, its interpretation is not entitled to deference.); Professional Airways Sys. Specialists v. Federal Labor Relations Authority, 809 F.2d 855, 857 n. 6 (D.C.Cir.1987). It necessarily follows that if the Commission has interpreted the labor laws in a fashion that undervalues or overlooks the policies those laws seek to promote, its attempt to determine whether and to what extent those policies can be reconciled within the framework of the shipping laws cannot be considered reasonable. See Southern Steamship Co., 316 U.S. at 46-48, 62 S.Ct. at 894-95. 149
150 As we have seen, both the ALJ and the Commission concluded that the Rules were unreasonable and unjustly discriminatory when analyzed, as tariffs must be, under the transportation considerations that have historically informed the Commission's substantive shipping law analysis. The ALJ went on to conclude, however, that these violations may be excused if: (1) the practices were the product of good faith collective bargaining; (2) the bargaining was over a subject of legitimate labor concern; (3) there was no conspiracy between labor and management; and, most significantly, (4) the resulting harm to shippers from allowing the practices to be implemented is outweighed by the harm to labor interests in enjoining the practices. Initial Decision, 22 Shpg.Reg.Rep. at 1683. 151 On review, the Commission rejected the ALJ's analysis for several reasons. First, relying on cases decided under the Interstate Commerce Act, the Commission noted that 152 common carriers in other transportation modes have not been excused from their statutory obligations on the basis of collective bargaining agreements with their employees.... [A] common carrier may not bargain away such duties in a labor agreement and then defend its actions on the grounds that it served a greater public interest by avoiding a strike and preserving labor peace. 153 50 Mile Rules, 24 Shpg.Reg.Rep. at 455. 154 Second, the Commission concluded that, in order for an outwardly discriminatory or burdensome practice to be considered reasonable within the meaning of the shipping laws, it must be justified by recognized transportation conditions ... such as peculiarities in the nature of the transportation needs of the cargo, competition from other carriers, insufficient cargo to warrant service at a particular port, or conditions at a port or other facility that truly are beyond the carrier's control. In the Commission's view, a collective bargaining agreement and labor peace on the docks should [not] be considered together with 'traditional' transportation factors in determining whether the Rules are reasonable. To do so would permit the carriers to bargain with the union without any incentive to safeguard their fundamental common carrier obligations. Id. at 455-56. 155 Finally, the Commission regarded the four-part test used by the ALJ as contrary to the policies underlying the MLAA, because [it] would require [the agency] to return once again to making findings of fact regarding the collective bargaining process and to rendering interpretations of the National Labor Relations Act. Id. at 456. More fundamentally, however, the Commission rejected the ALJ's purported comparison of benefits and burdens as totally unworkable because it requires the Commission to compare inherently unlike factors, such as labor gains against shipping losses. Id. at 459. 156 Nonetheless, the Commission recognized that it should, if possible, interpret the shipping laws in a manner that gives effect to the policies underlying both these laws and the labor laws. It concluded, however, that in this case, because the National Labor Relations Act does not apply ... in either its terms or its underlying policies, there exists only ... a 'false conflict' that the FMC is not obliged to resolve by attempting to blend the two bodies of law. Id. at 459. The Commission also concluded that even if it were appropriate to accommodate labor interests, there was no reasonable or feasible methodology by which this could be done, consistent with its obligations under the shipping laws. Id. at 459. 11 The Commission also recognized that any remedy it ordered would affect the collective bargaining relationship between the ILA and the carriers. It concluded that labor policies could be considered in fashioning a remedy, and that the remedy chosen should be precise and narrowly drawn so as to minimize the impact upon that relationship. 157 The primary thrust of petitioners' challenge to the Commission's conclusions, as outlined above, is that the exclusion of labor factors from the Commission's analysis prior to its remedial stage creates unnecessary conflict between the shipping laws and the labor laws, in derogation of the Commission's duty to accommodate the two regimes. More specifically, they contend that the Commission's conclusion that the labor laws are not implicated in this case is nothing less than an ostrich-like denial of reality, because in declaring the Rules unlawful, the Commission effectively nullified the rights of ILA members to preserve their work. Such a result, they argue, is necessary neither to vindicate the policies of the shipping laws nor to ensure that the technological efficiencies of containerization are made fully available to the shipping public. They further contend that the Commission's exclusion of labor policies contravenes the Supreme Court's express instructions to administrative agencies in McLean Trucking, 321 U.S. at 80, 64 S.Ct. at 377. 158 [I]n executing th[e] policies [of its organic statute, an agency] may be faced with overlapping and at times inconsistent policies embodied in other legislation enacted at different times and with different problems in view. When this is true, it cannot, without more, ignore the latter. The precise adjustments which it must make, however, will vary from instance to instance depending on the extent to which Congress indicates a desire to have those policies leavened or implemented in the enforcement of the various specific provisions of the legislation with which the [agency] is primarily and directly concerned. 159 The petitioners point out that in the shipping laws, the relevant portions of which are reproduced in Appendix B to this opinion, Congress chose not to make it unlawful for a carrier to burden or discriminate among shippers under any and all circumstances, but only when the result is unjust, undue, or unreasonable. Thus, they argue, the proscriptions of the shipping laws are not hard and fast rules, and a carrier's obligations under those laws are not in any sense absolute. The capacity and suppleness of the statutory language make it clear, they suggest, that Congress intended that the Commission would make the type of precise adjustments for labor policies in its shipping law determinations that the Court held the ICC was required to make for antitrust policies in McLean Trucking. They conclude that 160 since the Rules vindicate work preservation rights guaranteed by Congress, the Commission must uphold them unless they go beyond the realm of reasonableness. Evaluation of reasonableness requires consideration of a variety of factors, including the history of the challenged provisions, the evil they seek to remedy, the underlying reasons for their adoption, the ends they seek to achieve, and the effects of their implementation. 161 In short, the issue before us is the extent to which the Commission must consider petitioners' interests in work preservation when evaluating the reasonableness of the Rules. 162 We discern three types of cases that raise the question whether an agency is required to accommodate the policies of another statutory regime within the framework of the legislation it administers. In the first category, a regulated party argues that conduct that violates the terms of the agency's organic statute is privileged under the terms of another statute. These may be styled false conflict cases, because there is no anomaly if conduct privileged under one statute is nonetheless condemned by another; we expect persons in a complex regulatory state to conform their behavior to the dictates of many laws, each serving its own special purpose. In cases of this type, an administrative agency need not make any accommodation to the constraints that other laws place upon the regulated person. 163 The second category differs from the first in one critical respect: the regulated party's conduct, in violation of the agency's organic statute, is not merely privileged under another statute; it discharges an affirmative obligation or involves the exercise of a right guaranteed thereunder. The agency enforcing its statute is thus faced with what we shall call a true conflict, although it is not to be confused with that phrase as it used in other contexts. In such a case, the agency must fully enforce the requirements of its own statute, but must do so, insofar as possible, in a manner that minimizes the impact of its actions on the policies of the other statute. 164 In the third category of cases, an agency is required by its own organic law to consider congressional policies articulated in other statutes. Its mandate to regulate in the public interest incorporates an obligation to consult those aspects of the public interest reflected in statutes administered by others. These incorporation cases differ from cases of alleged conflict principally in that the question for the court is not whether an agency accommodation is required, but whether Congress intended the agency to consult the public interest more broadly than an exclusive focus on the purposes served by its organic legislation would allow. 165 The false conflict category is illustrated by a series of cases in which regulated common carriers entered into hot cargo agreements with the union representing their employees. 12 In Galveston Truck Line Corp. v. Ada Motor Lines, Inc., 73 M.C.C. 617 (1957), a motor carrier complained to the ICC that connecting trunk-line carriers had refused to accept and forward interline shipments tendered to them by short-line carriers. The trunk-line carriers claimed that their actions were justified by reason of the [hot cargo] terms of their labor contracts, and the labor situation in existence at the time. 73 M.C.C. at 620. The ICC rejected these arguments, concluding that the carriers 166 gave preferential effect to the demands of the union representatives over their duties and obligations to the public, and their claim that their actions were in the best interests of the public as a whole, in that they were able to continue service to most of their many customers, is shallow indeed, even assuming that they had a right to make a determination as to which customers to serve and which to refuse. 167 Id. at 628. 168 The crucial import of Galveston is that a regulator of common carriers will not condone conduct that violates the terms of its organic statute merely because that conduct may be lawful under another statutory regime. As the ICC noted, [w]e are here concerned, not with the legality of the 'hot cargo' clauses as such, but with the actions of the defendant carriers in relation to their obligations under the Interstate Commerce Act to the public, without regard to the terms of any contract which they may have executed with a third party. Galveston, 73 M.C.C. at 625-26; see also Merchandise Warehouse Co. v. A.B.C. Freight Forwarding Corp., 165 F.Supp. 67, 76 (S.D.Ind.1958) (carrier must insist upon contractual terms with the Union that will permit [it] to fulfill i[ts] duties under applicable regulatory laws); Pickup and Delivery Restrictions, California, Rail, 303 I.C.C. 579, 594 (1958). 169 In Sand Door, the Supreme Court approved and generalized the foundation upon which Galveston rested by emphasizing that the policies of diverse statutory regimes are best preserved if each agency scrupulously avoids deciding questions of law or policy that more properly lie within the jurisdiction of another agency, when a more limited inquiry into the requirements of its own statute is sufficient to dispose of the question before it. Thus, the Court, per Justice Frankfurter, endorsed the ICC's approach: 170 It is significant to note the limitations that the Commission was careful to draw about its decision in the Galveston case. It was not concerned to determine, as an abstract matter, the legality of hot cargo clauses, but only to enforce whatever duty was imposed on the carriers by the Interstate Commerce Act and their certificates. The Commission recognized that it had no general authority to police such contracts, and its sole concern was to determine whether a hot cargo provision could be a defense to a charge that the carriers had violated some specific statutory duty. 171 357 U.S. at 109, 78 S.Ct. at 1021. By the same token, the Court disapproved the NLRB's contention that hot cargo provisions contained in collective bargaining agreements should be deemed unlawful, not solely because of policies underlying the labor laws, but also because, by entering a contract not to handle the goods the [employer] carrier violates its obligations under the Interstate Commerce Act to provide nondiscriminatory service and to observe just and reasonable practices. Id. at 109, 78 S.Ct. at 1021. The Court approached the question not in terms of whether the NLRB's interpretation of the Interstate Commerce Act was correct, but in terms of its institutional competence to interpret that Act at all: 172 [O]ther agencies of government, in interpreting and administering the provisions of statutes specifically entrusted to them for enforcement, must be cautious not to complicate the [ICC's] administration of its own act.... 173