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 Precedential or Non-Precedential: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
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994
Recommended Citation "Mcquestion v. NJ Transit Auth." (1994). 1994 Decisions. Paper 71. http://digitalcommons.law.villanova.edu/thirdcircuit_1994/71
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 1994 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. 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.