NORFOLK & WESTERN RAILROAD CO. v. NEMITZ ET AL.
No. 70-97
Supreme Court of the United States
Argued October 21, 1971—Decided November 15, 1971
404 U.S. 37
Thomas J. Murray, Jr., argued the cause and filed a brief for respondents.
Solicitor General Griswold, Fritz R. Kahn, and Leonard S. Goodman filed a brief for the United States et al. as amici curiae urging reversal.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
In connection with a 1964 consolidation by which petitioner railway company absorbed New York, Chicago & St. Louis R. Co. (Nickel Plate), the so-called Sandusky Line, running from Columbus, Ohio, to Sandusky, Ohio, was acquired from the Pennsylvania Railroad system. Respondents were at the time employees of the Pennsylvania on the Sandusky Line. Their work was seasonal because the winter freeze barred navigation on Lake Erie. During those periods junior employees of Sandusky
In anticipation of the 1964 consolidation, petitioner entered into an agreement with 19 labor organizations for protection of the employees of the several railroads coming into the consolidation, including those on the Sandusky Line. Petitioner agreed to employ “all employees of the lines involved with the guarantee that they will not be adversely affected in their employment as a result of the proposed transactions or for any reason other than furloughs due to seasonal requirements or a decline in volume of traffic or revenue.” 324 I. C. C. 1, 89 (emphasis added).
Each employee was to receive a monthly supplement to his post-consolidation monthly earnings equal to the excess, if any, of his average monthly compensation for the 12 months prior to the consolidation in which he had performed services.
Some 96 Sandusky Line employees elected to accept employment with petitioner on the terms and conditions stated. Twenty-five were junior men who had worked seasonally on the Toledo Division and they were the plaintiffs in this action.
The consolidation took place and over a year elapsed during which these trainmen were not paid the compensation promised. Arbitration pursuant to the collective agreement was agreed upon. At that point in 1965 the union and petitioner entered into a new agreement which reduced substantially the benefits of the junior trainmen who had been Sandusky Line employees. The District Court (287 F. Supp. 221, 309 F. Supp. 575) held that this new agreement was not enforceable as a matter of law as it violated the Act under which the consolidation or merger took place. The Court of Appeals affirmed, 436 F. 2d 841, with a modification that the damages due
Section 5 (2) (f)1 of the Interstate Commerce Act as amended, 54 Stat. 906,
The ICC in its approval of the consolidation or merger (324 I. C. C. 1, 106 (1964)) stated that the agreements respecting, inter alia, the rights of the Sandusky Line employees were “made pursuant to and in conformity with section 5 (2) (f) of the Interstate Commerce Act for the protection of covered employees.”2
It construed the agreements as requiring “that job eliminations as a result of the proposed acquisition of control be accomplished only through normal attrition.” Ibid.
The mandate of
We disagree with that view. We reviewed the history of
When there is a collective agreement and the Commission, as here, adopts or approves it, the “notwithstanding” sentence of
In 1965 an implementing agreement, entered into after the consolidation, was made between the union and petitioner. It is petitioner‘s claim that it limited these junior employees to their average monthly earnings on the Sandusky Line during the 12 months before the consolidation, regardless of how many months the employees had worked during that period on other sections of the Toledo Division. That is to say, each of them would receive under the 1965 implementing agreement an average monthly compensation based only on their seasonal Sandusky Line work. Thus, respondent Nemitz had an average monthly compensation of $583.34 representing pre-consolidation work on several sections of the Toledo Division. Under the
“An agreement made pursuant to the last sentence of Sec. 5 (2) (f) may vary the protections afforded by the I. C. C. order, but it may not substantially abrogate employees’ rights grounded in an I. C. C. order.” 436 F. 2d, at 848.
We agree with that view. We also agree that the 1965 implementing agreement5 abrogated the standard
The judgment below is therefore
Affirmed.
MR. JUSTICE BLACKMUN, with whom THE CHIEF JUSTICE and MR. JUSTICE WHITE join, dissenting.
I am sympathetic with the respondents and with the unfortunate predicament in which, largely by their own acts, they find themselves. I feel, however, that the Court‘s decision to the effect that federal district court jurisdiction exists here and that the judgment of the Court of Appeals is to be affirmed amounts only to a sympathetically imposed judicial cure that is not authorized by the Interstate Commerce Act, that is violative of Congress’ intent, and that ignores unusually clear legislative history.
In January 1962 the Norfolk & Western and the respondents’ own Brotherhood, and others, entered into an agreement for the protection of employees in the event of approval of the anticipated merger. This agreement, by the express terms of its paragraph VIII, was directed to “the last sentence of Section 5 (2) (f) of the Interstate Commerce Act.” In October 1965 the railroad and the union, and others, entered into an Implementing Agreement. It then follows, it seems to me, that a number of factors demand a result opposite to that reached by the Court:
1. The very language of the statute. Section 5 (2) (f) was added to the Interstate Commerce Act by the
The first sentence directs the Interstate Commerce Commission, as a condition of its approval of any railroad merger, to “require a fair and equitable arrangement to protect the interests of the railroad employees affected.” The second sentence states that in its order of approval the Commission shall include provisions protective for a four-year period. The third sentence then reads:
“Notwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees.”
This plain and unambiguous “notwithstanding” language, obviously and necessarily directed to and affecting only the two preceding sentences, requires that an agreement entered into by the carrier and the collective-bargaining representative be controlling. The two preceding sentences have application, therefore, only when an agreement “pertaining to the protection of the interests of said employees” is not executed. In the case before us the carrier and the Brotherhood did execute an agreement of the kind specified, and the “notwithstanding” language should come into play. The Court today nullifies that sentence and reads it out of the Act.
2. The legislative history. This history is clearly antagonistic to respondents’ position here. The Transportation Act of 1940 was no accident or floor-conceived legislation. Indeed, Senator Wheeler was led to “venture
What is now
Representative Harrington had succeeded in amending the House bill to include a directive that the Commission approve no transaction resulting in unemployment or displacement of employees. 84 Cong. Rec. 9882, 9886, 10127. The conference committee, however, eliminated all employee-protection provisions. When the bill again reached the House floor, Mr. Wadsworth proposed the recommitment of the bill with instructions, among others, to include merger provisions and the “notwithstanding” sentence, drafted by the railroad unions themselves. 86 Cong. Rec. 5886. As to that sentence,
“But this provision also contains a clause that permits the industry, through the processes of collective bargaining, to work out its problems in a democratic manner.” 86 Cong. Rec. 5871.
The motion to recommit passed. The conference committee in due course then reported
“And, then there was also further uncertainty in the opinion of some representatives of railroad labor as to whether the language of the amendment might not preclude voluntary agreements, between management and men by collective bargaining, from being entered into.
“I want, however, to make it clear that no one who expressed the opinions I have mentioned thought for a moment that any of these possibilities were ever intended by the sponsors of the amendment.” 86 Cong. Rec. 10189.
And Congressman Lea referred to the “notwithstanding” sentence as “a provision confirming the right of employees to enter into agreements with railroads to take care of them in case of unemployment as a result of consolidations.” 86 Cong. Rec. 10178.
For me, all this evinces a clear and positive intent on the part of the authors of this legislation to make appropriate provision for employee protection, but explicitly to withdraw Commission-dictated protection whenever the carrier and the union, before merger, voluntarily arrive at protective provisions satisfactory to them. This was the purpose of the “notwithstanding” clause: Furthermore, it is in accord with the “strong federal labor policy against governmental interference with the sub-
Respondents urge that this Court in the past has recognized the Commission‘s responsibility to review the sufficiency of third-sentence voluntary agreements and to “adopt” them as part of its orders, citing Railway Executives’ Assn. v. United States, 339 U. S. 142 (1950), and Brotherhood of Maintenance of Way Employes v. United States, 366 U. S. 169 (1961). These are the only two decisions the Court produces to support its theory of jurisdiction. Neither is apposite. The former case presented the question whether under sentence two the Commission had the power to prescribe protective provisions extending beyond the four-year period to which that sentence refers. The holding was in the affirmative. The Court now makes much of the language of “mandatory protection” in that decision. But no pre-merger voluntary agreement had been made there, and the effect of sentence three did not enter the case. Nor had a pre-merger agreement been reached in the latter Maintenance of Way case, where the issue was whether, when the Commission formulates its own protective provisions under sentence two, it must require the carrier to retain employees for the four-year period or simply to guarantee them equivalent compensation. The disagreement between the parties there arose at the Commission hearing on what protective arrangements should be imposed by the Commission in fulfillment of its sentence two duty.
The Commission seems consistently to have taken a position in line with the legislative history noted above,
Neither respondents nor the Court points to a single instance in which a pre-merger voluntary protective agreement directed at
3. The effect on collective bargaining. The result reached by the Court appears to me to require the ICC and the courts always to intrude upon collective bargaining, by reviewing the sufficiency of its substantive product, and thereby to discourage and to downgrade the collective-bargaining process that has been so firmly established in this area and so steadfastly protected. See, for example, International Association of Machinists v. Street, 367 U. S. 740 (1961). As this case makes only too clear, the general standard of sentence two of
4. The facts and the element of choice. Contrary to the impression one might receive from a quick appraisal of either the opinions below or that of the Court here, it is not at all clear that the Implementing Agreement took from respondents something they had a reasonable expectation of receiving when the merger was approved. On its face, the application to respondents of the 1962 agreement, the language of which (“placed in a worse position with respect to compensation“) reflected the generality of
All this propels me to the conclusion that the Commission may not be held to have reviewed and incorporated the 1962 agreement into its 1964 order authorizing the merger. All it did was to state that its duty to see to the protection of employees under
Notes
“As a condition of its approval, under this paragraph, of any transaction involving a carrier or carriers by railroad subject to the provisions of this chapter, the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected. In its order of approval the Commission shall include terms and conditions providing that during the period of four years from the effective date of such order such transaction will not result in employees of the carrier or carriers by railroad affected by such order being in a worse position with respect to their employment, except that the protection afforded to any employee pursuant to this sentence shall not be required to continue for a longer period, following the effective date of such order, than the period during which such employee was in the employ of such carrier or carriers prior to the effective date of such order. Notwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees.”
“As previously stated herein and in appendix A, various agreements have been reached between employee representatives and
“We find that, as conditioned herein, the transactions under consideration meet the requirements prescribed by sections 5 (2) and 20a of the act and conform generally with the purposes and objectives of the national transportation policy declared by Congress. We are convinced that the transactions should be approved.”
In the Appendix to its Report and Order, 324 I. C. C., at 89, the Commission continued:
“Norfolk & Western has entered into an agreement with 19 of the principal labor organizations, members of the Railway Labor Executives’ Association, for the protection of employees of Norfolk & Western, Nickel Plate, and Wabash, as well as persons employed on the Sandusky Line of Pennsylvania, represented by these organizations. This agreement, which provides for the assumption by Norfolk & Western of all outstanding labor contracts, schedules and agreements of Nickel Plate and Wabash, as well as those having application on the Sandusky Line, basically requires that job eliminations as a result of the unification be accomplished only through normal attrition. Under its terms, Norfolk & Western agrees to take into its employment, upon consummation of the merger, lease, and purchase, all employees of the lines involved with the guarantee that they will not be adversely affected in their employment as a result of the proposed transactions or for any reason other than furloughs due to seasonal requirements or a decline in volume of traffic or revenue.”
“The agreement also authorized Norfolk & Western to transfer the work of employees throughout the merged system and requires the labor organizations to enter into implementing agreements permitting employees either to follow their work or be assigned to other jobs within their craft or class within the same general locality as existing jobs, following a period of retraining, if necessary, at Norfolk & Western‘s expense.”