Benjamin v. Traffic Executive Ass'n-Eastern

688 F. Supp. 903, 130 L.R.R.M. (BNA) 2844, 1988 U.S. Dist. LEXIS 5731, 1988 WL 61766
CourtDistrict Court, S.D. New York
DecidedJune 14, 1988
DocketNo. 85 Civ. 5482 (LLS)
StatusPublished
Cited by4 cases

This text of 688 F. Supp. 903 (Benjamin v. Traffic Executive Ass'n-Eastern) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Benjamin v. Traffic Executive Ass'n-Eastern, 688 F. Supp. 903, 130 L.R.R.M. (BNA) 2844, 1988 U.S. Dist. LEXIS 5731, 1988 WL 61766 (S.D.N.Y. 1988).

Opinion

OPINION

STANTON, District Judge.

Defendants’ motion for summary judgment and plaintiffs’ motion for a trial de novo raise the question of the legal effect to be given the determination of an Arbitration Board that the Eastern Weighing and Inspection Bureau (“EWIB”) employees represented by plaintiffs were not “employees of a rate bureau” entitled to protective benefits under § 219(g) of the Staggers Act, 49 U.S.C. § 10101 et seq., § 10706 note, when the EWIB was abolished and their employment was terminated.

BACKGROUND

The Harley O. Staggers Rail Act of 1980 ("Staggers Act”), 49 U.S.C. § 10101 et seq., eliminated antitrust immunity for collective ratemaking in the railroad industry. It was foreseen that as a consequence the railroad rate bureaus would be dismantled and their employees discharged. Accordingly, under § 219(g) of the Staggers Act, the Interstate Commerce Commission (“ICC”) is required to see that rail carrier employers provide the affected railroad rate bureau employees with “fair arrangements no less protective of the interests of such employees than those established pursuant to Section 11347” of the Interstate Commerce Act. 49 U.S.C. § 10706 note. Section 11347 was enacted in 1940 to provide employees whose jobs are adversely affected by railroad mergers, acquisitions and leases with “fair and equitable” protective conditions, and under it the ICC developed various forms of labor protective conditions. The applicable protective conditions, known as the “New York Dock Conditions”, see New York Dock Railway-Control-Brooklyn Eastern District Terminal, 354 I.C.C. 399 (1978), modified in part, 360 I.C.C. 60 (1979), aff'd, 609 F.2d 83 (2d Cir.1979), provide salary continuation for up to six years as well as other benefits not offered to plaintiffs. Disputes concerning the “interpretation, application or enforcement” of New York Dock benefits are settled by arbitration. Walsh v. U.S., 723 F.2d 570, 574 (7th Cir.1983); McKeon v. Toledo, Peoria & Western R.R., 595 F.Supp. 766, 769 (C.D.Ill.1984); Swartz v. Norfolk & Western Ry., 589 F.Supp. 743 (E.D.Mo.1984).

In this case, protective benefits virtually identical to the New York Dock Conditions were offered to employees of the Eastern Railroad Association who were dismissed or moved to less desirable positions due to the implementation of the Staggers Act, but were not offered to the EWIB employees, represented by plaintiffs in this action, whose employment was terminated when the EWIB ceased operations. They were offered a termination payment if they signed a release of all claims against the EWIB, but the termination benefits offered them did not meet the minimum requirements of the New York Dock Conditions.

As required, the question whether the terminated EWIB employees are entitled to the more favorable benefits was submitted to arbitration. Hearings were held before a three member arbitration panel on May 14, May 15 and July 10, 1986. The parties filed pre- and post-hearing briefs, submitted documentary evidence, and were given the opportunity to present and cross-examine witnesses through oral and written testimony. The parties voluntarily exchanged documents before the hearings, but no depositions were taken and no interrogatories propounded.

On September 29, 1986 the arbitration board issued its award. A majority of the three member panel held that the work done by EWIB employees (such as establishing and monitoring agreements on methods of determining weights of shipments, volumes and numbers of carloads and shipments through intermediate points; inspection and evaluation of loss and damage; checking scales; etc.) was different from formulating and publishing rates, [906]*906that it was not implementation of the Staggers Act but other factors which caused the cessation of the EWIB’s operations, and that accordingly the discharged employees of the EWIB are not entitled to the protective benefits of either § 219(g) of the Staggers Act or the ERA offer.

Claims in this Action

In Count I of their complaint, plaintiffs allege that defendants violated § 219(g) of the Staggers Act by “unilaterally decreepng]” that it does not apply to plaintiffs, failing to provide the required minimum protective conditions, and coercing releases by withholding termination benefits if they were not executed. In Count II, plaintiffs claim that defendants’ acitons are indictable under the federal mail fraud statute, 18 U.S.C. § 1341, and constitute a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. In Count III, plaintiffs allege that defendants’ actions constitute common law fraud. Count IV asserts that defendants’ statements that plaintiffs were not entitled to protective benefits were breaches of fiduciary duty.

It is apparent from the foregoing, and both sides recognize, that none of plaintiffs’ claims can succeed if the arbitration award is upheld and applied.

Defendants urge that the arbitration award is to be given effect, subject only to review either by the ICC, and the Court of Appeals under 28 U.S.C. § 2321(a), or by the District Court under the Railway Labor Act — and that in either event the award bars plaintiffs’ claims.

Plaintiffs seek a trial de novo, arguing that it is required (1) to protect their right to due process of law, (2) to prevent the delegation of Article III judicial powers to arbitrators, (3) to preserve their right to a jury trial, and (4) to promote the federal policy of judicial enforcement of RICO claims. Alternatively, plaintiffs contend that their § 219(g) claim should be reviewed in accordance with the Administrative Procedure Act.

In evaluating these claims, and plaintiffs’ constant emphasis on the fact that the arbitration was involuntary on their part, one must bear steadily in mind that the benefits at issue are not matters of common-law right or of contract. They are tendered by a statute (or by the ERA offer) to certain employees only, and the designated method for determining their application is arbitration. Thus, assertions about rights the plaintiffs lose by being forced to arbitrate are wide of the mark with respect to benefits whose scope is expressly to be determined by arbitration. See Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985).

DISCUSSION

I. Review of Arbitration Award

In adopting the protective conditions of § 11347, Congress also adopted the review mechanisms created by the ICC and the courts pursuant to § 11347.

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688 F. Supp. 903, 130 L.R.R.M. (BNA) 2844, 1988 U.S. Dist. LEXIS 5731, 1988 WL 61766, Counsel Stack Legal Research, https://law.counselstack.com/opinion/benjamin-v-traffic-executive-assn-eastern-nysd-1988.