Baltimore & Ohio Railroad v. Commonwealth

334 A.2d 636, 461 Pa. 68, 1975 Pa. LEXIS 726

• Court: Supreme Court of Pennsylvania
• Decided: March 18, 1975
• Docket: No. 165
• Status: Published

Opinions

OPINION OF THE COURT

ROBERTS, Justice.

As a result of an administrative proceeding commenced by appellant United Transportation Union, appellee railroads were directed to adopt weekly pay periods for certain of their employees, as required by Pennsylvania Act No. 43 of 1971.¹ The railroads appealed this order to the Commonwealth Court, urging that the Act was invalid under the Supremacy Clause of the United States Constitution because it conflicted with the federal Railway Labor Act² and because it invaded a field totally occupied and therefore preempted by the Railway Labor Act.³ They also argued that Act No. 43 discriminated against railroads without any rational basis for distinction from other businesses, in violation of the Equal Protection Clause of the Fourteenth Amendment and article III, section 32 of the Pennsylvania Constitution, P.S. The Commonwealth Court, two judges dissenting, held that Act No. 43 conflicted with the Railway Labor Act and was therefore unconstitutional.⁴ We granted leave to appeal in order to consider the important questions involved.⁵ We reverse.

Prior to 1971, Pennsylvania law required railroads to pay their employees not less often than semi-monthly,⁶ and appellees utilized bi-weekly pay periods. Despite the passage of Act No. 43, appellees continued to utilize bi-weekly pay periods ⁷ and appellant union filed administrative complaints with the Department of Labor and Industry, contending that, as to certain of appellees’ employees, this practice was in violation of the Act. The Department held an administrative hearing and found that some of appellees' employees were covered by no “contract of hiring or . . . applicable labor agreement” providing for other than weekly payment of wages.⁸ Appellees were ordered to pay “those employees ... in accordance with [the] Act.” The appeal to the Commonwealth Court ensued.

Appellees’ principal contention, and the basis of the Commonwealth Court’s decision, is federal preemption. Clearly, state law which directly conflicts with federal legislation is invalid under the Supremacy Clause. Perez v. Campbell, 402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971). Furthermore, even if there is no direct conflict, the state law may be invalid if it infringes where Congress has undertaken such comprehensive regulation as to evidence an intent to exclude all state legislation. Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956) (federal statute preempts state statute prohibiting sedition); Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941) (federal alien registration statute occupies the field and precludes operation of state laws on same subject); Bessemer & L.E.R.R. v. Pennsylvania Public Utilities Commission, 430 Pa. 339, 243 A.2d 358, cert. denied, 393 U.S. 959, 89 S.Ct. 395, 21 L.Ed.2d 373 (1968) (federal regulation of railroad safety preempts state regulation requiring particular methods of preventing rear-end collisions). Appellees contend that Act No. 43 is defective in both respects.

The method for resolving the question of conflict is shown by Perez v. Campbell, supra:

“Deciding whether a state statute is in conflict with a federal statute and hence invalid under the Supremacy Clause is essentially a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question whether they are in conflict.”

Id. at 644, 91 S.Ct. at 1708.

The first step of this process presents no difficulty. The objectives and operation of the Railway Labor Act were summarized in Terminal Railroad Association v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 63 S.Ct. 420, 87 L.Ed. 571 (1943), itself a preemption case:

“The purpose of this Act is declared to be to provide ‘for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions’; and ‘for the prompt and orderly settlement of all disputes growing out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.’ It places upon carriers and employees the duty of exerting every reasonable effort to settle these disputes by agreement, and prohibits the carrier from altering agreed rates of pay, rules or working conditions except in the manner provided by the agreement or by the Act itself. Machinery is set up for the adjustment, mediation, and arbitration of disputes which the parties do not succeed in settling among themselves.”

Id. at 5, 68 S.Ct. at 422 (footnotes omitted).

The purpose of Act No. 43 is apparent on its face. It seeks to insure prompt payment of the wages earned by railroad employees where no provision on the timing of payment is included in an applicable collective bargaining agreement or “contract of hire.”

Passing to the second step of the conflict analysis, the test to be applied is clear. Act No, 43 is invalid if it stands “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941); Perez v. Campbell, 402 U.S. 637, 649, 91 S.Ct. 1704, 1711, 29 L.Ed.2d 233 (1971).

Clearly there is here no conflict between the purposes of the respective statutes. Compare Perez v. Campbell, supra;⁹ California v. Taylor, 353 U.S. 553, 77 S.Ct. 1037, 1 L.Ed.2d 1034 (1957) (state law purporting to forbid collective bargaining by employees of publicly owned railroad engaged in interstate commerce held invalid). Further, Act No. 43 expressly defers to any “applicable labor agreement,” so it can never “be applied to prevent the contracting parties from carrying out their agreement upon a subject matter as to which federal law directs them to bargain.” Local 24, Teamsters v. Oliver, 358 U.S. 283, 295, 79 S.Ct. 297, 304, 3 L.Ed.2d 312 (1959); see California v. Taylor, supra, at 561, 77 S.Ct. at 1042 (dictum); Railway Employees Department v. Hanson, 351 U.S. 225, 232, 76 S.Ct. 714, 718, 100 L.Ed. 1112 (1956) (dictum).

The manner in which appellees construct the purported conflict is more complex. The Railway Labor Act “imposes an obligation upon the parties to a railroad labor dispute to maintain the status quo while the ‘purposely long and drawn out’ procedures of the Act are exhausted.” Detroit & T.S.L.R.R. v. United Transportation Union, 396 U.S. 142, 143, 90 S.Ct. 294, 295, 24 L.Ed.2d 325 (1969) (footnote omitted). This not only requires compliance with any collective bargaining agreement between the parties, but the preservation of the “actual, objective working conditions . . . which were in effect prior to the time the pending dispute arose and which are involved in or related to that dispute.” Id. at 153, 90 S.Ct. at 301 (footnote omitted). At the time Act No. 43 was enacted, there was an existing dispute between appellees and the union over the union’s request to adopt weekly pay periods. Consequently, appellees argue, Act No. 43 commands them to alter the status quo which they are compelled by federal law to maintain.

While plausible, this argument cannot withstand analysis. To begin with, appellees are not subject to conflicting legal obligation (to maintain and to change the status quo). Appellees would not violate the Railway Labor Act by complying with Act No. 43 because that compliance is precisely what the union seeks.

Moreover, appellees’ interpretation bears little relation to “the Act’s primary objective — the prevention of strikes.” Id. at 154, 90 S.Ct. at 301. The Railway Labor Act does not prohibit changes in the status quo as such, but only unilateral changes by one of the parties, which would provoke retaliation by the other. As the Supreme Court said in Detroit & T.S.L.R.R. v. United Transportation Union, supra:

“If the railroad is free at this stage to take advantage of the agreement’s silence and resort to self-help, the union cannot be expected to hold back its own economic weapons, including the strike. Only if both sides are equally restrained can the Act’s remedies work effectively.”

Id. at 155, 90 S.Ct. at 302 (footnote omitted).

This danger is not present where, as here, the change is mandated by state law rather than adopted unilaterally by one of the parties. There is no provocative exercise of self-help, and before any resort is made to self-help, the procedures of the Act must be exhausted. Consequently, we conclude that there is no direct conflict between Act No. 43 and the Railway Labor Act.

The question remains whether the Railway Labor Act has undertaken such a comprehensive regulation of the field of railway labor as to evidence an intent to exclude all state legislation, without regard to conflict. See Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956); Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941); Bessemer & L.E.R.R. v. Pennsylvaia Public Utilities Commission, 430 Pa. 339, 243 A.2d 358, cert. denied, 393 U.S. 959, 89 S.Ct. 395, 21 L.Ed.2d 373 (1968). “The test of whether both federal and state regulations may operate, or the state regulation must give way, is whether both regulations can be enforced without impairing the federal superintendence of the field . . . .” Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 142, 83 S.Ct. 1210, 1217, 10 L.Ed. 2d 248 (1963).

Because the Railway Labor Act is clearly a comprehensive scheme of regulation, exclusive within its own province, it is crucial to ascertain the boundaries of that province. The Supreme Court has delineated the field covered by the Railway Labor Act in many cases involving preemption questions.

“ ‘ [T] he Railway Labor Act * * * does not undertake governmental regulation of wages, hours, or working conditions. Instead it seeks to provide a means by which agreement may be reached with respect to them. The national interest * * * is not primarily in the working conditions as such. So far as the Act itself is concerned these conditions may be as bad as the employees will tolerate or be made as good as they can bargain for. The Act does not fix and does not authorize anyone to fix generally applicable standards for working conditions. The federal interest that is fostered is to see that disagreement about conditions does not reach the point of interfering with interstate commerce.’ ”

Brotherhood of Locomotive Engineers v. Baltimore & O.R.R., 372 U.S. 284, 289-90, 83 S.Ct. 691, 694, 9 L.Ed.2d 759 (1963).

The principle that the Railway Labor Act does not preclude a state from regulating the working conditions of railway employees was established in the first case to consider the preemptive effect of that Act, Terminal Railroad Association v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 63 S.Ct. 420, 87 L.Ed. 571 (1943). That case involved a state requirement that a railroad equip its trains with cabooses on designated routes. That requirement, like this one, was the subject of a preexisting dispute between the railroad and its employees, the existing contract calling for cabooses on some trains, but not those subject to the state order. The Court nonetheless rejected the contention that the Railway Labor Act precluded the operation of the state regulation.

Justice Jackson, writing for a unanimous Court, first observed that the procedures of the Railway Labor Act operate “to compose differences that threaten continuity of work, not to remove conditions that threaten the health or safety of workers.” Id. at 6, 63 S.Ct. at 423. He continued:

“State laws have long regulated a great variety of conditions in transportation and industry, such as sanitary facilities and conditions, safety devices and protection, purity of water supply, fire protection, and innumerable others. Any of these matters might, we suppose, be the subject of a demand by workmen for better protection and upon refusal might be the subject of a labor dispute which would have such effect on interstate commerce that federal agencies might be invoked to deal with some phase of it. But we would hardly be expected to hold that the price of the federal effort to protect the peace and continuity of commerce has been to strike down state sanitary codes, health regulations, factory inspections, and safety provisions for industry and transportation. . . . We hold that the enactment by Congress of the Railway Labor Act was not a preemption of the field of regulating working conditions themselves and did not preclude the State of Illinois from making the order in question.”

Id. at 6-7, 63 S.Ct. at 423.

Appellees urge, however, that the power of the state to regulate working conditions is limited to matters of health and safety. In support of this proposition they cite United Air Lines, Inc. v. Industrial Welfare Commission, 211 Cal.App.2d 729, 28 Cal.Rptr. 238 (1963). That case involved a state regulation prohibiting an employer in the transportation industry from requiring an employee to contribute to the cost of purchase or maintenance of uniforms. The airline''challenged the power of the state to apply this regulation to two classes of its employees: stewardesses and ticket agents. The stewardesses were covered by a collective bargaining agreement providing for a division of the cost of uniforms between employer and employee. The ticket agents were not covered by any collective bargaining agreement. As to the ticket agents, the court summarily rejected the preemption argument, holding that “the inhibitions in the Railway Labor Act apply only where there is such an agreement.” Id. at 749, 28 Cal.Rptr. at 249.

The key to the analysis which led the United Air Lines court to conclude that the state law was preempted as it applied to stewardesses was Local 24, Teamsters v. Oliver, 358 U.S. 283, 79 S.Ct. 297, 3 L.Ed.2d 312 (1959). In that case, the Supreme Court held that Ohio antitrust law could not preclude the operation of a collective bargaining agreement providing for minimum rentals on owner-operated trucks. The basis for this holding was the conclusion that, in the type of case before the Court, state law could not “be applied to prevent the contracting parties from carrying out their agreement upon a subject matter as to which federal law directs them to bargain.” Id. at 295, 79 S.Ct. at 304. The Court then limited its holding by noting, “We have not here a case of a collective bargaining agreement in conflict with a local health or safety regulation . . . .” Id. at 297, 79 S.Ct. at 305.

Carefully read, the United Air Lines case is nothing more than a simple application of Oliver. A collective bargaining agreement existed and conflicted with the state regulation. Since the state regulation involved neither health nor safety, it could not prevail over a collective bargaining agreement having “the imprimatur of federal law.” Railway Employees’ Department v. Hanson, 351 U.S. 225, 232, 76 S.Ct. 714, 718, 100 L.Ed. 1112 (1956). United Air Lines is therefore inapposite to this case, for there is and can be no conflict between Act No. 43 and any “applicable labor agreement.”

There is no support in the decisions of the Supreme Court for appellees’ contention that, even in the absence of conflict with a collective bargaining agreement, the states are precluded from non-health related regulation of the working conditions of railroad employees. Indeed, the contrary result follows from the general principles outlined above, particularly in the light of the Supreme Court’s admonition that,

“[T]he principle to be derived from our decisions is that federal regulation of a field of commerce should not be deemed preemptive of state regulatory power in the absence of persuasive reasons — either that the nature of the regulated subject matter permits no other conclusions, or that the Congress has unmistakably so ordained.”

Florida Lime & Avocado Growers v. Paul, 372 U.S. 182, 142, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963).

As the Supreme Court has noted, the purpose of the Railway Labor Act is “to compose differences that threaten continuity of work, not to remove conditions that threaten the health or safety of workers.” Terminal Railroad Association v. Brotherhood of Railroad Trainmen, supra, at 6, 63 S.Ct. at 423. While the issue was not then before the Court, the reasoning applies equally well to threats to employee welfare not directly involving health or safety.

Thus, there is here no pervasive regulation of the field in which Act No. 43 operates, such as this Court found in Bessemer & L.E.R.R. v. Pennsylvania Public Utilities Commission, 430 Pa. 339, 243 A.2d 358, cert. denied, 393 U.S. 959, 89 S.Ct. 395, 21 L.Ed.2d 373 (1968) (railroad safety). Neither does Act No. 43 “‘touch a field in which the federal interest is so dominant that the federal system [must] be assumed to preclude enforcement of state laws on the same subject.’ ” Pennsylvania v. Nelson, 350 U.S. 497, 504, 76 S.Ct. 477, 481, 100 L.Ed. 640 (1956) (sedition against federal government); see Hines v. Davidowitz, 312 U.S. 52, 62-68, 61 S.Ct. 399, 401-05, 85 L.Ed. 581 (1941) (alien registration). Finally, there is no unmistakable Congressional command to exclude state regulation of labor conditions affecting railroad employees. Consequently, we conclude that Act No. 43 is not preempted. See Florida Lime & Avocado Growers v. Paul, supra.

While we have rejected the preemption reasoning on which the Commonwealth Court rested its holding, we must also consider appellees’ contentions under the Equal Protection Clause of the federal Constitution and article III, section 32 of the Pennsylvania Constitution.¹⁰ These issues may be considered together, for the content of the two provisions is not significantly different. Bargain City U.S.A. v. Dilworth, 407 Pa. 129, 131-33, 179 A.2d 439, 441-42 (1962); compare Milk Control Commission v. Battista, 413 Pa. 652, 198 A.2d 840, appeal dismissed, 379 U.S. 3, 85 S.Ct. 75, 13 L.Ed.2d 22 (1964), with Williamson v. Lee Optical, Inc., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955); see also Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 13, 331 A.2d 198, 204 (1975).

Neither the Equal Protection Clause nor article III, section 32’s prohibition of special laws forbids the state to draw distinctions. Rather, both require only that the distinctions drawn have some rational relation to a proper state purpose.¹¹ Tosto v. Pennsylvania Nursing Home Loan Agency, supra; Johnson v. Pennsylvania Housing Finance Agency, 453 Pa. 329, 347, 309 A.2d 528, 538 (1973); Williamson v. Lee Optical, Inc., supra; Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed. 2d 349 (1972).

Appellees urge most forcefully that there is no basis for singling out railroads from the class of common carriers as the subject of this regulation. But the Legislature may have found differences in the structure of the business or labor relations environment between the railroad industry and other common carriers. In particular it might have found differences in the normal pattern of employment-related travel creating an unusual need for prompt payment of railroad workers. Alternatively, it might have concluded that in other branches of industry, either weekly payment or agreements for less frequent payment were so widespread that the statute would have no effect. Yet again it might have, noted the current financial instability of railroads and concluded that this statute was necessary to minimize the exposure of railroad employees to loss in the event of the insolvency of their employer. Any of these conclusions would furnish a rational basis for Act No. 43. See McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393 (1961); Williamson v. Lee Optical Inc., 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955); Note, Developments in the Law — Equal Protection, 82 Harv.L. Rev. 1065,1085 (1969).

We conclude that Act No. 43 neither denies appellees the equal protection of the laws nor is a special law prohibited by article III, section 32 of the Pennsylvania' Constitution.

Order of the Commonwealth Court setting aside the order of the Secretary of Labor and Industry reversed.

POMEROY, J., filed a dissenting opinion in which JONES, C. J., joins.

1 . “Unless otherwise stipulated in the contract of hiring or in the applicable labor agreement, every common carrier by railroad or corporation or joint stock association, operating a steam, electric, or diesel surface railroad, or engaged in the sleeping car business, or carrying on the business thereof by lease or otherwise, shall pay once each week to each employee, the wages earned for the seven day period ending not more than fourteen days prior to such payment. Wages as the term is herein used shall be limited to those derived from basic pro rata rates of pay pursuant to labor agreement, and shall not include incentives, bonuses, and other similar types of fringe payments.”

Act of July 14, 1971, P.L. 221, No. 43, 43 P.S. § 255.1 (Supp. 1974).

2 . 45 U.S.C. i 151 et seq. (1970).

3 . Reference was also made to the Commerce Clause, but this was clearly intended only as the source of the power exercised by Congress in enacting the Railway Labor Act. No argument is made that, absent the Railway Labor Act, the Pennsylvania statute would impose an undue burden upon interstate commerce.

4 . Baltimore & O. R. R. v. Commonwealth, 12 Pa.Cmwlth. 292, 314 A.2d 862 (1974).

5 . Appellate Court Jurisdiction Act of 1970, Act of July 31, 1970, P.L. 673, art. II, § 204(a), 17 P.S. § 211.204(a) (Supp.1974).

6 . As in the present statute, this requirement was inapplicable if the timing of wage payments is “otherwise stipulated in the contract of hiring or in the applicable labor agreement.” Act of April 24, 1913, P.L. 114, § 1 (repealed 1971). See also note 1 supra.

7 . The union represents in its brief that all other railroads in the Commonwealth voluntarily complied with Act No. 43.

8 . This finding is not contested on appeal. The employees in question are covered by a collective bargaining agreement, but it does not deal with frequency of payment.

9 . “[A] state statute that protects judgment creditors from ‘financially irresponsible persons’ is in conflict with a federal statute that gives discharged debtors a new start ‘unhampered by the pressure and discouragement of preexisting debt.’ ”

Perez v. Campbell, 402 U.S. 637, 649, 91 S.Ct. 1704, 1711, 29 L.Ed.2d 233 (1971).

10 . It is well settled that, even though an order is based on erroneous reasoning, this Court may affirm if the result is correct for any reason. Estate of Prynn, 455 Pa. 192, 197 n. 9, 315 A.2d 265, 267 n. 9 (1973); Concord Township Appeal, 439 Pa. 466, 469, 268 A.2d 765, 766 (1970); Ridley Township v. Pronesti, 431 Pa. 34, 37, 244 A.2d 719, 720-21 (1968); Taylor v. Churchill V.C.C., 425 Pa. 266, 228 A.2d 768 (1967); Sherwood v. Elgart, 383 Pa. 110, 117 A.2d 899 (1955).

11 . The test is more stringent if the basis of the classification is “suspect” or if it infringes upon a “fundamental right.” See generally San Antonio Independent School Dist. v. Rodriguez, 411 U. S. 1, 17-44, 93 S.Ct. 1278, 1288-1302, 36 L.Ed.2d 16 (1973). No claim is made that either a “suspect classification” or a “fundamental right” is involved in this case.