Court Opinion

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Opinions of the United
1994 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

7-5-1994

Mcquestion v. NJ Transit Auth.
Precedential or Non-Precedential:

Docket 93-5515

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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
                          ____________

                          No. 93-5515
                          ____________

                    RICHARD M. McQUESTION,
                                        Appellant
                                v.

           NEW JERSEY TRANSIT RAIL OPERATIONS, INC.,
                                       Appellee
                          ____________

                          LOUIS A. HART,
                                           Appellant
                               v.

           NEW JERSEY TRANSIT RAIL OPERATIONS, INC.,
                                       Appellee
                          ____________

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF NEW JERSEY
              (D.C. Civ. Nos. 88-04037 & 89-00660)
                           ___________

           Submitted Pursuant To 3rd Cir. LAR 34.1(a)
                        January 28, 1994

      Before:   MANSMANN, NYGAARD, and WEIS, Circuit Judges

                    Filed July 6, 1994
                           ____________

Thomas M. McCarthy, Esquire
90 Maple Avenue
Red Bank, New Jersey 07701

Attorney for Appellants Richard M. McQuestion and Louis A. Hart

Fred Devesa, Esquire
Acting Attorney General of New Jersey
Joseph L. Yannotti, Esquire
Assistant Attorney General
Robert A. Shire, Esquire
Deputy Attorney General
Richard J. Hughes Justice Complex
CN-112

                                1
Trenton, New Jersey    08625

Attorneys for Appellee New Jersey Transit Rail Operations, Inc.

                               ____________

                        OPINION OF THE COURT
                            ____________

WEIS, Circuit Judge.

          In this appeal, we hold that under the Railway Labor

Act, 45 U.S.C. § 151 et seq., grievances arising from the

discharges of two employees should be arbitrated by the National

Railroad Adjustment Board.      We conclude that despite the absence

of a formally ratified collective bargaining agreement, a de
facto agreement existed and that the Adjustment Board erred in

declining to exercise jurisdiction over the grievances.

Accordingly, we will reverse the district court's judgment

sustaining the Adjustment Board's position.

          Police Officers Richard M. McQuestion and Louis A. Hart

were employed by New Jersey Transit Rail Operations, Inc. until

they were discharged on June 20, 1985 and August 2, 1985,

respectively.   At the time of their discharges, they were members

of the New Jersey Transit Policemen's Benevolent Association.

Although the Benevolent Association was actively negotiating with

N.J. Transit, no collective bargaining agreement had yet been

ratified by the union membership at the time when the employees

were discharged.   During the pendency of negotiations, however,

employee conduct and grievance procedures followed work rules

derived from an earlier, non-ratified draft of an agreement.

                                    2
           After unsuccessfully pursuing in-house grievance

procedures, the Benevolent Association petitioned the Adjustment

Board to arbitrate the employee discharges.    The Adjustment Board

dismissed both claims on the ground that it lacked jurisdiction,

stating:   "In the absence of a ratified contractual agreement

between the parties that covers Claimant's employment, the Board

has no contractual basis upon which to rule."

           The employees then filed petitions for review in the

United States District Court for the District of New Jersey.       The

court dismissed the petitions on the ground that the employees

lacked standing to contest the Adjustment Board's rulings on

claims filed on their behalf by the union.    We reversed.   See

McQuestion v. New Jersey Transit Rail Operations, 892 F.2d 352

(3d Cir. 1990).

           On remand, the district court again denied the

petitions for review.   The court concluded that the Adjustment

Board's jurisdiction under 45 U.S.C. § 153 First (i) is limited

to "resolve only `minor' disputes which have come to be defined

as those arising out of the interpretation and application of the

collective bargaining agreement."    Rejecting the employees'

argument that the interim operating procedures implemented by

N.J. Transit governed the dispute, the court decided that they

were "not the same as procedures which are the ratified product

of the collective bargaining process."    The employees then filed

a second appeal with this Court.

                                I.

                                3
            We exercise plenary review over the sole issue before

us -- whether the employee discharges in this case are subject to

the exclusive jurisdiction of the Adjustment Board.       See Miklavic

v. USAir, Inc., 21 F.3d 551, 553 (3d Cir. 1994).

            One of the primary purposes of the Railway Labor Act is

to avoid disruptions to commerce caused by interruptions in the

operations of rail and air carriers as the result of labor

unrest.   The method of resolution of disputes between a carrier

and its employees depends on whether the conflicts are classified

as either "major" or "minor."     "Major" disputes are those

concerning the formation or modification of collective bargaining

agreements.     See id.   "Minor" disputes cover those more-or-less

routine employee grievances that arise daily within the railway

industry.   Union Pac. R.R. v. Sheehan, 439 U.S. 89, 94 (1978)

(per curiam).

            There is no serious contention here that we are

confronted with a "major" dispute, and the real issue is whether

the discharges are "minor" for purposes of establishing the

exclusive jurisdiction of the Adjustment Board.     The pertinent

statutory provision, codified at 45 U.S.C. § 153 First (i), reads

in pertinent part:

            "The disputes between an employee or group of

            employees and a carrier or carriers growing

            out of grievances or out of the

            interpretation or application of agreements

            concerning rates of pay, rules, or working

            conditions . . . may be referred by petition

                                   4
          of the parties or by either party to the

          appropriate division of the Adjustment Board

          . . . ."

          In Elgin, Joliet & E. Ry. v. Burley, 325 U.S. 711, 723

(1945), the Supreme Court described the statutory arrangement for

the Adjustment Board's role as contemplating

          "the existence of a collective agreement

          already concluded or, at any rate, a

          situation in which no effort is made to bring

          about a formal change in terms or to create a

          new one.   The dispute relates either to the

          meaning or proper application of a particular

          provision with reference to a specific

          situation or to an omitted case.   In the

          latter event the claim is founded upon some

          incident of the employment relation, or

          asserted one, independent of those covered by

          the collective agreement, e.g., claims on

          account of personal injuries."1

          Later in the opinion, the Court noted that the

Adjustment Board had authority to determine what the employer and

union had "agreed upon previously or, outside the scope of a

collective agreement, what rights the carrier and its employees

1
The Court further pointed out that "minor" disputes are
generally those over rights accrued under a collective agreement
and are not aimed at creating new ones for the future. Burley,
325 U.S. at 723.

                                5
may have acquired by virtue of other incidents of the employment

relation."    Id. at 747-48 n.44.

             In Consolidated Rail Corp. v. Railway Labor Executives'

Ass'n, 491 U.S. 299 (1989), the parties had entered into a

collective bargaining agreement, and the issue was whether the

dispute should be classified as "major" or "minor."     After

reiterating the Burley test, the Court observed that neither

party relied on any express provision of the agreement.

Commenting that the parties based their arguments instead on

implied contractual terms, the Court concluded that "`practice,

usage and custom' is of significance in interpreting their

agreement."     Id. at 311.   Accordingly, although the collective

bargaining agreement was completely silent on the issue at hand,

the Court held that the dispute between the union and the

railroad was a "minor" one and within the exclusive jurisdiction

of the Adjustment Board.      Id. at 312.

             The purpose of the Railway Labor Act and the role of

the Adjustment Board was set out in Sheehan, 439 U.S. at 94.

Describing the Adjustment Board as a tribunal for workers and

management to secure the prompt, orderly, and final settlement of

day-to-day grievances between employees and carriers regarding

rates of pay, rules, and working conditions, the Court observed

that "Congress considered it essential to keep these so-called

`minor' disputes within the Adjustment Board and out of the

courts."     Id.; see also Pennsylvania Fed'n of Bhd. of Maintenance
of Way Employees v. National R.R. Passenger Corp., 989 F.2d 112,

                                    6
114 (3d Cir. 1993); Association of Flight Attendants v. USAir,

Inc., 960 F.2d 345, 347 (3d Cir. 1992).

          The burden imposed upon a party asserting that a

dispute is "minor" is a "light" one.   Southeastern Pa. Transp.

Auth. v. Brotherhood of R.R. Signalmen, 882 F.2d 778, 783 (3d

Cir. 1989).   Whenever there is doubt as to whether a particular

dispute is a "major" or a "minor" one, courts will construe the

dispute to be "minor." See, e.g., Hirras v. National R.R.

Passenger Corp., 10 F.3d 1142, 1145 (5th Cir. 1994), petition for

cert. filed, 62 U.S.L.W. 3693 (U.S. Apr. 7, 1994) (No. 93-1584);

General Comm. of Adjustment, United Transp. Union, W. Md. Ry. v.

CSX R.R., 893 F.2d 584, 591 (3d Cir. 1990); Brotherhood of

Locomotive Eng'rs v. Atchison, Topeka & Santa Fe Ry., 768 F.2d

914, 920 (7th Cir. 1985).

          As a general matter, disagreements about whether a

discharge from employment was proper and whether the claim

brought by the employee is within the ambit of the relevant

agreement are matters within the jurisdiction of the Adjustment

Board.   See Andrews v. Louisville & Nashville R.R., 406 U.S. 320,

324 (1972); Capraro v. United Parcel Serv. Co., 993 F.2d 328, 333
(3d Cir. 1993) (wrongful discharge is a minor dispute).   In

United Steelworkers, Local 913 v. Union R.R., 648 F.2d 905, 911

(3d Cir. 1981), we held that "[a]n employee complaining of a

wrongful discharge after an investigative hearing has been

conducted must submit the claim to an adjustment board pursuant

to the Railway Labor Act."

                                7
          Most of the decisional law in this area discusses

situations where a collective bargaining agreement already

exists.   However, as Consolidated Rail points out, the dispute

need not be governed by the specific terms of the collective

bargaining agreement; implied terms, past practices, usage, and

custom are sufficient bases for the resolution of a controversy

by the Adjustment Board.   Consolidated Rail, 491 U.S. at 311.

          Some courts have mentioned in dicta the existence of a

formal collective bargaining agreement as a prerequisite to the

Adjustment Board's jurisdiction.    See e.g., Consolidated Rail,

491 U.S. at 305; Miklavic, 21 F.3d at 554; Association of Flight

Attendants, 960 F.2d at 349; United Transp. Union v. Conemaugh &

Black Lick R.R., 894 F.2d 623, 628 (3d Cir. 1990); General Comm.

of Adjustment, 893 F.2d at 589; Southeastern Pa. Transp. Auth.,

882 F.2d at 783; Childs v. Pennsylvania Fed'n Bhd. of Maintenance

Way Employees, 831 F.2d 429, 437 (3d Cir. 1987); International

Ass'n of Machinists v. Northwest Airlines, 673 F.2d 700, 708 (3d

Cir. 1982); Goclowski v. Penn Cent. Transp. Co., 571 F.2d 747,

756 (3d Cir. 1977).   The terms of an agreement are often

irrelevant, however, to the actual resolution of the dispute.

Courts must be wary of the curious metamorphosis that sometimes

occurs in decisional law when a coincidence of fact in earlier

opinions is treated as a jurisdictional element in later cases.

See United States v. McElroy, 644 F.2d 274, 277 (3d Cir. 1981)
(en banc), aff'd, 455 U.S. 642 (1982).   That being so, dicta

about the necessity of a formal collective bargaining agreement

must be read with caution.

                                8
            The statute speaks of disputes "growing out of

grievances or out of the interpretation or application of

agreements concerning rates of pay, rules, or working

conditions."    45 U.S.C. § 153 First (i).   In Burley, the Court

commented somewhat enigmatically about the existence of a

collective bargaining agreement "already concluded or, at any

rate, a situation in which no effort is made to bring about a

formal change in terms or to create a new one [presumably a new

collective bargaining agreement]."    Burley, 325 U.S. at 723. What

is considered an "agreement" for purposes of invoking the

jurisdiction of an Adjustment Board has not received extensive

analysis.

            In Pittsburgh & Lake Erie R.R. v. Railway Labor

Executives' Ass'n, 491 U.S. 490, 503 (1989), the issue in dispute

-- the sale of railroad assets causing the loss of jobs of two-

thirds of the railroad's employees -- was concededly not within

the scope of the written collective bargaining agreement.     In its

opinion, the Court wrote:     "Of course, not all working conditions

to which parties may have agreed are to be found in written

contracts.     It may be that `in the context of the relationship

between the principals, taken as a whole, there is a basis for

implying an understanding on the particular practice involved.'"

Id. at 503-04 (quoting Detroit & Toledo Shore Line R.R. v. United
Transp. Union, 396 U.S. 142, 160 (1969) (Harlan, J.,

dissenting)).     It is not necessary that the relevant agreement

between the parties be contained only in a formal written

document that specifically addresses the issue in dispute.     See

                                  9
Transportation-Communication Employees Union v. Union Pac. R.R.,

385 U.S. 157, 161 (1966) ("In order to interpret [an agreement

under the Railway Labor Act] it is necessary to consider the

scope of other related collective bargaining agreements, as well

as the practice, usage and custom pertaining to all such

agreements."); Chicago & N.W. Transp. Co. v. Railway Labor

Executives' Ass'n, 908 F.2d 144, 156 (7th Cir. 1990) (normative

practices can create implied obligations in a collective

bargaining agreement); Southeastern Pa. Transp. Auth., 882 F.2d

at 785 (parol evidence may be used to interpret collective

agreements under the Railway Labor Act); CSX Transp. v. United

Transp. Union, 879 F.2d 990, 1000 (2d Cir. 1989) (An agreement is

established where a carrier's past practices have been accepted

by union).

             In Southeastern Pa. Transp. Auth., 882 F.2d at 784 n.4,

we concluded that "principles developed in construing collective

bargaining agreements in the NLRA context provide relevant and

useful guidance [for interpreting the Railway Labor Act]."     See

Mack Trucks, Inc. v. International Union, 856 F.2d 579, 592 (3d

Cir. 1988) ("Adoption of an enforceable labor contract does not

depend on the reduction to writing of the parties' intention to

be bound."); see also Merk v. Jewel Food Stores Div. of Jewel
Cos., 945 F.2d 889, 895 (7th Cir. 1991) ("[A] collective

bargaining agreement may be partly or wholly oral as well as

partly or wholly in writing, and a written collective bargaining

agreement may be orally modified."); NLRB v. Haberman Constr.
Co., 641 F.2d 351, 355-56 (5th Cir. 1981) (en banc) ("[A] union

                                  10
and employer's adoption of a labor contract is not dependent on

the reduction to writing of their intention to be bound. Instead,

what is required is conduct manifesting an intention to abide by

the terms of an agreement." (footnote and citations omitted)).2

          In Luden's Inc. v. Local Union No. 6 of the Bakery

Confectionery & Tobacco Workers Int'l Union, No. 92-1982, slip

op. (3d Cir. June 17, 1994), employees remained on the job while

the union and management continued to negotiate after a

collective bargaining agreement had lapsed.    After a new contract

had ostensibly been agreed upon, a dispute erupted over one

provision.    We held that the arbitration process in the expired

collective bargaining agreement should be utilized to resolve the

dispute and described the relationship between the parties as

creating an "implied in fact" contract.    We determined that the

arbitration provision had remained in effect given the absence of

any evidence that the parties intended otherwise and because they

acted as if that portion of the expired agreement would continue

to govern.    Id. at 35.

             By way of contrast, in Davies v. American Airlines, 971

F.2d 463, 468 (10th Cir. 1992), Regional Airline Pilots Ass'n v.
Wings W. Airlines, 915 F.2d 1399, 1401 (9th Cir. 1990), and

Lancaster v. Norfolk & W. Ry., 773 F.2d 807, 814 (7th Cir. 1985),

the Courts of Appeals took the position that a dispute that was

2
Contrast the provision in the National Labor Relations Act, 29
U.S.C. § 158(d), that requires the execution of a written
contract if requested by either party. Note also the requirement
for a writing if a claim implicates an employer's duty to pay
into union pension funds under 29 U.S.C. § 186(c)(5)(B). See
Abbate v. Browning-Ferris Indus., 767 F.2d 52, 56 (3d Cir. 1985).

                                  11
not covered by the terms of a written collective bargaining

agreement was not a "minor" one.      We are not persuaded by those

cases, but are instead inclined to follow those courts which have

adopted a flexible stance on the jurisdiction of the Adjustment

Board.   For example, in Railway Labor Executives Ass'n v.

Atchison, Topeka & Santa Fe Ry., 430 F.2d 994, 996 (9th Cir.

1970), the Court found that a pay dispute not within the terms of

the collective bargaining agreement, but "founded upon some

incident of the employment relationship" was within the

jurisdiction of the Adjustment Board.

           Similarly, in Missouri-Kansas-Texas R.R. v. Brotherhood

of R.R. Trainmen, 342 F.2d 298, 300 (5th Cir. 1965) (Maris, J.,

sitting by designation), the Court concluded that grievances over

unsafe and hazardous working conditions were arbitrable disputes

within the jurisdiction of the Adjustment Board even where no

express provision in the collective agreement governed that

issue.   In the same vein, Hirras, 10 F.3d at 1149 stated:

"[S]tate law claims that `grow out of the employment relationship

can constitute "minor disputes" under the [Railway Labor Act],

even when the claims do not arise directly from the collective

bargaining agreement itself.'"   (quoting Morales v. Southern Pac.
Transp. Co., 894 F.2d 743, 745 (5th Cir. 1990)).

          The airline industry is also subject to the Railway

Labor Act, but its contracts are more often subject to definite

term limits than those of rail carriers.     Consequently, disputes

occurring at a time when a collective bargaining agreement is not

                                 12
in effect are more numerous in that industry and have come to the

attention of appellate courts.

          In International Ass'n of Machinists v. Aloha Airlines,

776 F.2d 812 (9th Cir. 1985), the parties disputed the wages

payable after a collective bargaining agreement had expired and

during the period of negotiations for a new agreement.    The Court

observed that the dispute was not subject to arbitration because

"there was simply no existing collective bargaining agreement to

interpret."    Id. at 816.

          The Court of Appeals for the D.C. Circuit rejected this

approach in Air Line Pilots Ass'n, Int'l v. Eastern Air Lines,

863 F.2d 891, 898 (D.C. Cir. 1988), concluding that the assertion

that a dispute automatically becomes a "major" one when the

agreement expires "appears to disregard the existence of disputes

that are altogether outside the contractual relation of the

parties and to slight the long line of precedents . . . that

emphasize settled past practice in classifying disputes as major

or minor."    The Court commented that the nature of a dispute is

not determined solely from explicit terms of a written agreement,

but it may also be derived from the past course of dealings

between the parties.   Id. at 899.    Disputes that were once

considered "minor" before the termination of a collective

bargaining agreement do not change their characteristics

thereafter.   The Court in Eastern Air Lines quoted with approval

from Brotherhood of Maintenance of Way Employees, Lodge 16 v.
Burlington N. R.R., 802 F.2d 1016, 1022 (8th Cir. 1986),

acknowledging that "`[w]hen long-standing practice ripens into an

                                 13
established and recognized custom between the parties, it ought

to be protected against sudden and unilateral change as though it

were part of the collective-bargaining agreement itself.'"

Eastern Air Lines, 863 F.2d at 899.

          In Miklavic, 21 F.3d at 554, we were confronted by the

conflict between Aloha and Eastern Air Lines and adopted the

rationale of Eastern Air Lines.    We pointed out that following

Aloha "would mean that every dispute, no matter how firmly based

in the existing but expired contract and no matter how

insignificant, would become a major dispute subject to federal

court jurisdiction."   Id. at 554-55.   We had previously cited

Eastern Air Lines with approval for the proposition that to gain

a comprehensive picture of the relationship between the parties,

and thus of the full scope of the dispute, "`courts must consider

the express terms of any agreements and well established

practices that have developed through the [parties'] past course

of dealings.'"   General Comm. of Adjustment, 893 F.2d at 592.

          From these cases we may arrive at some general

conclusions about the requirement of a collective bargaining

agreement as it relates to the jurisdiction of the Adjustment

Board:

          1.     The dispute need not be governed by the written

terms of an agreement, but may be resolved by resorting to

employment practice or custom;

          2.     An agreement need not be in writing for the

purpose of invoking the jurisdiction of the Adjustment Board; and

          3.     After the expiration of a written, ratified labor

                                  14
contract, the parties may by their practice or custom, continue

to be governed by the terms of the prior contract.

                                        III.

          With these precepts in mind, we turn our attention to

the grievances at hand.   A determination of the legal

consequences of the parties' relationship here requires a

somewhat detailed history of the events that occurred before the

grievances arose.

          Our recital of the facts is colored by the posture of

the case before us.   In effect, the district court granted

summary judgment for N.J. Transit in affirming the denial of

jurisdiction by the Adjustment Board.      Most of the pertinent

facts are not controverted, but we have considered the evidence

in the record in the best light from the standpoint of the

employees, McQuestion and Hart.

          The saga began before January 1, 1983 when N.J. Transit

took over certain commuter rail lines that had previously been

operated by Consolidated Rail Corporation (Conrail).        The

transfer was authorized by the Rail Passenger Service Act as

amended by the Northeast Rail Service Act of 1981.        45 U.S.C.

§§ 586, 588.   The statute required N.J. Transit and employee

representatives to negotiate an implementing agreement that would

govern the transfer of former Conrail employees to N.J. Transit

and the retention of their seniority rights.

          The statute also required N.J. Transit and employee

representatives to enter into new collective bargaining

agreements by September 1, 1982.       Id. § 590(a).   If the parties

                                  15
were unable to reach an agreement under § 590(b)-(g), an

emergency board requested by a party and created by the President

of the United States could make a non-binding selection of one of

the final offers, with employees retaining the right to strike.

This procedure was the "exclusive means" for resolving disputes

relating to the formation of an initial collective bargaining

agreement.    Id. § 590(h).

             Pursuant to the statute, N.J. Transit negotiated with

the International Brotherhood of Teamsters, at that time the

bargaining representative of police officers transferring from

Conrail.     Although the union representatives and N.J. Transit

reached an agreement, the union membership failed to ratify it.

             Following the procedures of 45 U.S.C. § 590, a

Presidential Commission conducted a hearing and, in late 1982,

issued its non-binding recommendation that the union adopt the

contract its representatives had previously negotiated with N.J.

Transit.     The union rejected the recommendation and was then at

liberty to strike if it so chose.      The members, however,

continued to work after January 1, 1983 without ratifying the

proposed agreement even though the previous contract between

Conrail and the union had expired on December 31, 1982.

             In August of 1983, the Benevolent Association replaced

the Teamsters as the bargaining representative for the police

officers employed by N.J. Transit.      In the fall of 1983, the

                                  16
union sent an untimely request to the National Mediation Board in

an attempt to bring an end to the impasse.3

          According to the union, when negotiations broke off,

N.J. Transit -- using self-help -- implemented the unratified

agreement as the operating guide for regulating the employment of

the police officers.   Correspondence from N.J. Transit supports

this assertion.4

          Article 16 of the unratified January 1, 1983 agreement

provided that police officers who had been in service for more

than one year would not be suspended or dismissed "without just

cause and without a fair and impartial trial."   Provisions for

in-house trials and appeals were included as well.

          This was the state of the relationship between N.J.

Transit and its police officers in 1985.   On June 20, 1985,

McQuestion was dismissed because of an incident in which, while

on his way to work, he fired his pistol and wounded a motorist.

Hart was dismissed on August 2, 1985 because of evidence that he

had been arrested and charged with possession of cocaine.   Both

3
 The facts in the two foregoing paragraphs were set out in an
affidavit filed by Patrick J. O'Brien, past President of the
Benevolent Association.
4
 In other litigation, in a similar factual setting, N.J. Transit
argued that there had been contract ratification through
performance, rather than that N.J. Transit had lawfully and
unilaterally implemented the unratified contract. See Dunn v.
New Jersey Transit Corp., 681 F. Supp. 246 (D.N.J. 1987).
Specifically, N.J. Transit argued that both it and the Benevolent
Association had "followed procedures for resolution of grievances
and appeals of disciplinary procedures which were contained in
the unratified agreement, including the clause which provides
that no employee dismissal shall occur `without just cause and
without a fair and impartial hearing.'" Id. at 249 (internal
quotation omitted).

                                17
McQuestion and Hart were given in-house trials and took appeals

to management officials in N.J. Transit as mandated by Article 16

of the agreement.   It was only after failing to prevail in these

efforts that the union filed petitions with the Adjustment Board.

          In its submissions to the Adjustment Board, the union

stated that the "unratified collective bargaining agreement . . .

[was] independently under dispute before another authority,"5 but

explained that the union was "forced to submit [the] submission

to [the Adjustment] Board pursuant to said agreement." However,

the legal arguments that followed were based upon language in

"the applicable agreement," and the practice of the union and

N.J. Transit in discharge cases indicated acquiescence with "the

agreement."

          The disputes between the two officers and their

employer are classic examples of "minor" disputes that, had the

agreement of January 1, 1983 been ratified, unquestionably would

have been adjudicated by the Adjustment Board.   Indeed, these are

precisely the kinds of disputes that the Supreme Court made clear

were to be kept out of the federal courts and to be resolved in

arbitration.

5
On May 3, 1985, the union filed a petition with the New Jersey
Public Employment Relations Commission, asserting that the state
board had authority to resolve the impasse between N.J. Transit
and the union over the formation of a formal collective
bargaining agreement. In 1986, the agency held that the state
statute was preempted by the Rail Passenger Service Act and,
alternatively, by the Railway Labor Act. New Jersey Transit
Corp., 12 NJPER ¶ 17280 (1986). The union explained that it did
not wish to be prejudiced in that state case by asserting before
the Adjustment Board that it had agreed with the implementation
of the 1983 unratified contract.

                                18
          Based on the less than complete record here, it is

apparent that although the January 1, 1983 agreement was not

ratified by the union, N.J. Transit and the union put its

grievance provisions into effect.    These provisions formed the

basis for the employment relationship between the union and N.J.

Transit in the more than two-year interim before the McQuestion

and Hart claims arose.

          Neither the union nor N.J. Transit have ever questioned

that an agreement existed to the effect that an officer could not

be dismissed except for "just cause" and only after "a fair and

impartial trial" -- the essential issues in the grievances

presently before us.   In addition, both the union and N.J.

Transit scrupulously followed the procedures set out in the

January 1, 1983 agreement in processing the two claims.

          Nothing in the record indicates that the "just cause"

and grievance procedures in Article 16 differed from those in the

contract that had expired on December 31, 1982.    In fact, in his

affidavit, former union President O'Brien averred:    "The

discipline/appeals provisions essentially mirrored those in the

[predecessor] Conrail-Teamsters' contract.   They are pretty much

industry standard."

          In the absence of an agreement, N.J. Transit would have

had the power to discharge the officers without cause.    See

Conrad v. Delta Air Lines, 494 F.2d 914, 916 (7th Cir. 1974).

However, the employer's compliance with the grievance procedures

in Article 16 is strong evidence that N.J. Transit recognized its

obligation to dismiss employees only for "just cause."

                                19
          N.J. Transit's joinder with the union in agreeing in

its original submission that the Adjustment Board had

jurisdiction is also significant.    Although the union and N.J.

Transit could not confer jurisdiction on the Adjustment Board by

consent,6 their mutual view that it existed is further evidence

that an enforceable employment relationship was in effect -- at

least as to discharges for cause only.

          In short, in the scenario we have discussed, there was

a de facto ("implied in fact") agreement on certain aspects of

the employment relationship between the union and N.J. Transit.

The fact that these particular matters were not incorporated into

a formal, ratified contract that included many other terms not

relevant to the dispute at hand does not deprive the Adjustment

Board of jurisdiction.   As noted earlier, the prerequisite

"agreement" is not limited to specific terms of a formal

collective bargaining agreement, but may instead include evidence

of past practices and custom such as those which seemingly exist

here.

          Moreover, if it develops that the discipline and "just

cause" provisions in the contract that expired on December 31,

1982 are essentially the same as those in the agreement the union

and N.J. Transit implemented in the grievance procedures

involving McQuestion and Hart, this case would fall within the

holding of Eastern Air Lines that we approved in Miklavic.    Thus,

6
The union argues that, in an earlier proceeding, the Adjustment
Board found that it did have jurisdiction in a similar case.
Dunn v. New Jersey Transit Rail Operations, Inc., Award No. 4365
(N.R.A.B., Fourth Div. Oct. 24, 1985).

                                20
if the performance of the union and N.J. Transit establishes that

the "just cause" and grievance provisions of the expired Conrail

agreement remained in effect during the pendency of negotiations

for a new collective bargaining agreement, they would constitute

the terms of the continuing employment relationship and would be

binding on the parties to this dispute.

            It follows that the Adjustment Board took an unduly

narrow view of its jurisdiction.      The Railway Labor Act does not

require a ratified collective bargaining agreement, but speaks

only in terms of an "agreement."      Caselaw also makes it clear

that provisions other than those specified in a written document

may be relevant and dispositive in the resolution of a dispute

before the Adjustment Board.

            In our view, the record establishes an agreement

between the union and N.J. Transit on the conditions under which

employment could be terminated and the grievance procedures to be

followed by a discharged employee.     In such circumstances, the

Adjustment Board would have jurisdiction to arbitrate the

disputes.   However, because the parties did not fully focus on

this aspect of the Adjustment Board's jurisdiction, they may

require a hearing and an opportunity to present further evidence

to clarify the record.

            Accordingly, we will reverse the judgment of the

district court and will remand for further proceedings consistent

with this opinion.

                                 21
McQuestion v. New Jersey Transit, No. 93-5515

NYGAARD, Circuit Judge, concurring and dissenting.

          The majority and I differ little in our reasoning and

conclusion.    But the differences, although small, are of

considerable importance.    I can assume without deciding that an

agreement existed, but only between the two appellants and their

employer, N.J. Transit.    I cannot agree, however, that the facts

of this case support the conclusion reached by the majority that

a collective bargaining agreement had been reached between N.J.

Transit and the appellants' union.    I also do not agree that we

can so lightly reject the Adjustment Board's definition of an

"agreement."    I would hold that the Adjustment Board properly

concluded that without a ratified collective bargaining

agreement, it had nothing to interpret and, therefore, no

jurisdiction.    I would conclude that if an agreement exists here,

it is not a "collective" agreement, nor an agreement between N.J.

Transit and the entire union, but merely an "individual"

agreement, which will not independently support federal

jurisdiction.    Hence, I too would reverse the order of the

district court, but would remand the cause for the district court

to determine if there exists an independent basis for

jurisdiction, and if not to dismiss.

          The Adjustment Board's jurisdictional authority comes

from 45 U.S.C. § 153 First (i), in which it is granted the power

to hear "disputes growing out of grievances or out of the

                                 22
interpretation or application of agreements concerning rates of

pay, rules or working conditions."    In Elgin, J. & E.R. Co. v.

Burley, 325 U.S. 711, 65 S. Ct. 1282 (1945), the Court said that

such disputes, termed "minor," are subject to arbitration and

"contemplate the existence of a collective bargaining agreement

already concluded or, at any rate, a situation in which no effort

is made to bring about a formal change in terms or to create a

new one."   Id. at 723, 65 S. Ct. at 1290.

            The essence of the Railway Labor Act is that it

authorizes collective bargaining units to select bargaining

agents and permits them to negotiate collective agreements with a

carrier/employer.    Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89,

94, 99 S. Ct. 399, 402 (1978) ("[T]he terms, purposes and

legislative history of the Railway Labor Act ... endeavor[] to

promote stability and labor management relations in this

important national industry by providing effective and efficient

remedies for the resolution of railroad/employee disputes arising

out of the interpretation of collective bargaining agreements.")

(emphasis added, internal citations omitted); Virginia Ry Co. v.
System Federation No. 40, 300 U.S. 592, 515, 57 S. Ct. 592, 600

(1937) (The declared purposes of the Act give to employees "the

right to organize and bargain collectively through a

representative of their own choosing ....") (emphasis added). The

Act uses the term "agreement," but given the purposes of the Act,

it is fundamental that it means a "collective bargaining

agreement," and is not meant to cover the garden variety, private

agreements any employer can reach with its individual employees.

                                 23
See Griesmann v. Chemical Lehman Tank Lines, Inc., 776 F.2d 66,

71 (3d Cir. 1985) ("A collective bargaining agreement is the

paradigmatic labor contract, covering a wide array of

contingencies that may arise in the employment relationship, and

distinguished by provisions for the arbitration of disputes

concerning the agreement's meaning and application.") (internal

citations omitted).

          In Davis v. Ohio Barge Line, Inc., 697 F.2d 549 (3d

Cir. 1983), an employee contended that a settlement agreement he

had reached with his employer should be enforceable under section

301 of the Labor Management Relations Act.      We rejected that

argument and concluded that "[a] private agreement between an

employer and employee independent of a collective bargaining

agreement generally does not fall within [the Labor Management

Relations Act] even though the complaint alleges some nexus with

the union."     Id. at 553.   We held that a federal court has

jurisdiction over a collective bargaining agreement under the

Labor Management Relations Act, but has "no independent basis for

jurisdiction" over the settlement agreement which the employer

and employee in Davis had reached.
          Here too, there is no collective bargaining agreement.

Merely because these two employees and N.J. Transit had at some

point acted as though they agreed upon some portions of the

rejected draft agreement, an enforceable collective bargaining

agreement was not thereby created between N.J. Transit and the

entire union.    At most, such an agreement would not be collective

                                   24
but individual and would be enforceable, if at all, under state

law and in state courts, not under the Railway Labor Act.

             N.J. Transit did impose upon its employees many of the

provisions which had earlier been proposed in the written draft.

But inasmuch as that draft had not been ratified, and indeed

because N.J. Transit had no collective agreement with its

employees, it was free to impose upon its employees any

conditions it wished within the bounds of the law.     N.J. Transit

did behave in a civilized fashion towards these two discharged

employees.    It gave them all the process to which they would have

been entitled under the unratified agreement.     Nonetheless, to

infer a federally enforceable de facto agreement between the

union and N.J. Transit, simply because these parties behaved as

they did, creates the possibility of much mischief and may well

discourage employers from giving employees any perquisites or

processes to which they are not entitled by law while contracts

are pending.

             The majority's conclusion that such a de facto

agreement comes within the Act is unsupported by any authority.

The majority modestly admits that "[m]ost decisional law in this

area discusses situations where a collective bargaining agreement

already exists."     (Maj. typescript at 8.)   It should be noted

that in each Railway Labor Act case cited in the majority
opinion, the parties either had a collective bargaining agreement

which controlled and defined their rights, or were operating

under an expired collective bargaining agreement during the

"status quo" provision of the Act.

                                  25
           Under the National Labor Relations Act, a collective

bargaining agreement must be in writing if requested by either

party.   29 U.S.C. § 158(d).   Although the record contains no

specific request for a writing, the preliminary draft was reduced

to writing; the written draft was submitted to the membership for

ratification; and in this form, it was rejected by the

membership.    There is simply nothing in this record to indicate

that an oral agreement was acceptable.      Rather, the only

supportable inference from this record is that both N.J. Transit

and the union expected their collective bargaining contract to be

in writing.    Consequently, I cannot infer that this alleged

agreement, which was neither in writing, signed by the

appellants, nor ratified by their union, can confer jurisdiction

on the Adjustment Board.

           In sum, I agree that if there were a valid ratified

written collective bargaining agreement, this would be a "minor"

and hence an arbitrable dispute.      I also agree that if the

appellants' union and N.J. Transit were parties to a collective

bargaining agreement, the issues in dispute would not need to be

covered by an express provision of the written contract.         I do

not, however, agree that an individual agreement between the

parties --    whether a "de facto agreement," an agreement by

implication, or an agreement created in any fashion other than as

contemplated by the Act -- either creates a collective bargaining

agreement between N.J. Transit and the union, or is the type of

"agreement" that will confer jurisdiction upon the federal courts

or the Adjustment Board.    Therefore, I conclude that unless

                                 26
another, independent basis for federal jurisdiction exists, this

case must be dismissed.

                               27