Rea Express, Inc. v. Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees

459 F.2d 226, 80 L.R.R.M. (BNA) 2206, 1972 U.S. App. LEXIS 9830

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 1, 1972
• Docket: 71-2212
• Status: Published

Opinions

GODBOLD, Circuit Judge:

This action involves a labor dispute between Railway Express, Inc. (REA), an express carrier governed by the Railway Labor Act, 45 U.S.C. § 151 et seq., and its operating personnel represented by the Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees (BRAC). The dispute concerned proposed changes by REA in its trucking operations. During the course of their controversy the parties reached a seeming impasse, and REA unilaterally instituted the proposed changes in its own favor. In response BRAC called a strike. REA filed suit in federal district court seeking an injunction against the strike. BRAC counterclaimed requesting a status quo order.

The question of the strike’s validity turns upon the determination of whether the underlying dispute is “major” — in which case the strike is permissible — or “minor” — in which circumstance BRAC cannot strike but must proceed with REA to arbitration before the National Railroad Adjustment Board. After a full evidentiary hearing and in an unpublished opinion the District Court held the dispute to be major. We reverse.

For many years REA has engaged in hauling freight. Initially its activities were carried on exclusively by rail, but in more recent years rail operations have become impractical and uneconomical. REA has, therefore, shifted more and more of its freight operations from rail to over-the-road (OTR) truck runs.

At present the parties are governed by a collective bargaining agreement effective since January 1, 1967. In apparent recognition of changing times, the contract to some extent undertook to provide for a smooth transition from rail operations to OTR runs. Rule 8 of the agreement provides:

By agreement with the General Chairmen in the Districts in which over-the-road truck runs, are operated, the provisions of Rules 4, 5, 6 and 9 may be suspended and special provisions will be established governing hours of service, overtime, and basis of pay of over-the-road truck runs.

In an attempt to explain more thoroughly the meaning and force of Rule 8, the parties also agreed to the following “Memorandum of Understanding” as to the application of the rule:

It is agreed and understood that under the application of Rule 8 existing over-the-road truck runs will continue to operate in accordance with Article IX of the September 1, 1949 Agreement. Arrangements concerning operation of new runs will be worked out by agreement between the General Chairmen and Company representatives except that: * * * *

In the event of failure to make an agreement concerning the operation of a new run within forty-five (45) days after notice is given to the General Chairman or General Chairmen representing the employees to be affected, the matter may be referred by either party to final and binding resolution in accordance with Sections 3 and/or 7 of the Railway Labor Act, as amended. The issues submitted for such determination shall not include any question as to the right of the Company to establish the run but shall be confined to the manner of implementing the run.

Prior to the dispute which gave rise to this litigation, REA and BRAC had been able to agree upon all changes in working conditions necessary to implement a substantial number of OTR runs. At first “slip-seat” runs were instituted; that is, with respect to a run between terminals such as Philadelphia and Boston a truck would leave each terminal traveling toward the other. The two trucks would meet at a prearranged point approximately midway between the two terminals, exchange trailers, and return to their home bases.

The drivers were paid a fixed amount per round trip. For several reasons slip-seating was inefficient. In the words of the District Court,

If one driver broke down or was unable to make the switching point on time, the other driver had to waste time awaiting his arrival. The time involved in switching operations was also lost, and REA found that, at least in some instances, the fixed “trip rate” agreed upon did not permit them to always get a full eight hours’ work for the equivalent of eight hours’ pay.

As a consequence of such shortcomings, REA and BRAC began renegotiating the operation of the OTR runs. The restructuring usually involved the elimination of the slip-seat arrangement and provided for a through run by one truck. Necessarily changes had to be made in layover procedures, hours of service, and rates of pay. All such matters were agreed upon on a run-by-run basis. During the existence of the 1967 contract, some 700 runs were restructured in this fashion. At the same time rail operations were continuing to dwindle, and OTR runs were substituted for inefficient rail routes. Changes in working conditions which arose on account of the substitution of an OTR run for a rail route were again worked out on an ad hoc basis for each run.

In the fall of 1970, REA proposed to substitute an OTR run for an existing rail run in the northeastern United States and to restructure 16 existing truck runs in the same geographical region. With respect to this proposal, the parties were unable to reach an accord on rates of pay, layovers, and changes in seniority and domicile rights. After lengthy negotiations and on April 13, 1971, REA served notice that it intended unilaterally to institute the proposed changes. The union denied the existence of such power and contended that since the proposals affected rates of pay and working conditions a major dispute was involved within the meaning of the Railway Labor Act. Accordingly, said the union, the changes could be made only by mediation pursuant to section 6 of the Act or by agreement. The union therefore served section 6 notices seeking to invoke the jurisdiction of the National Railroad Mediation Board. REA countered, stating that the dispute was minor, and refused to submit to mediation.

On April 19, 1971, as the date approached on which implementation was to occur, BRAC called a strike. Two days later REA filed its complaint in the United States District Court for the Northern District of Georgia. That court issued a temporary restraining order enjoining the strike, compelling the parties to negotiate further, and allowing REA to implement the disputed changes at its own risk pending a full hearing. REA did implement the changes.

Several weeks later, after a full evi-dentiary hearing, the District Court determined that the dispute was indeed major, and accordingly held that the union was automatically entitled to a status quo order, that is, an injunction forbidding REA’s continued implementation of the runs. But rather than restoring the status quo at that point, the court stayed its order pending appeal. The court announced the following rationale:

Though not called upon to do so, the court, after hearing the evidence in this case, expresses the opinion: (1) that, in the long run, the making of the changes proposed by the plaintiff here (as distinguished from the manner in which they were proposed and made) is probably in the best interest of both parties; and (2) that the defendant union probably has no serious objection to them per se, provided only that the manner of their implementation can be agreed upon. In view of these opinions the court has ordered restoration of the status quo most reluctantly and only because it felt compelled to do so. The court therefore recommends to the parties that, if they agree with these conclusions, they proceed with all haste to attempt to reach an agreement. It has also occurred to the court that the conclusions reached in this order may be found to be wrong. If so, much damage may have accrued and many backward steps may have been taken. The court also believes that, pending an appeal, if any, the danger of irreparable injury to plaintiff is greater than to defendant. If the position of defendant is affirmed it can always exact restitution in the end. In view of these considerations, and in order to give the parties time to consider the suggestions made by the court, it is therefore ORDERED that execution of this order be stayed for a period of ten days or until a ruling on any appeal herein, should one be filed.

The question before this court is whether the District Court erred in its determination that the dispute is major. Several consequences flow from that finding. First, with respect to a major dispute, the Act provides that after failure to negotiate an agreement the parties may voluntarily submit the dispute to the National Railroad Mediation Board. 45 U.S.C. §§ 155, 156. If either party refuses, the Mediation Board is without power to decide the dispute or to force the parties to arbitrate, and they are free to resort to self help. Id.; Elgin, Joliet & Eastern Ry. Co. v. Burley, 325 U.S. 711, 65 S.Ct. 1282, 89 L.Ed. 1886 (1945). Finally, upon request by one of the parties, the federal court is required to issue a status quo order. 45 U.S.C. § 156; Detroit & Toledo Shore Line R. R. Co. v. United Transportation Union, 396 U.S. 142, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969). On the other hand, if the dispute is minor the Act provides that upon failure to arrive at a negotiated settlement either party may request that the jurisdiction of the Adjustment Board be invoked. Elgin, supra. In such case the nonrequesting party must submit to arbitration, Id.; there is no right of self help. Id. And the federal court has discretion either to issue or to refuse to issue a status quo order. See Detroit & Toledo Shore Line, supra; Itasca Lodge 2029, of Broth. of Ry. and S. S. Clerks, etc. v. REA, 391 F.2d 657, 8th Cir. (1968); Switchmen’s Union v. Central of Georgia Ry. Co., 341 F.2d 213 (5th Cir.), cert. denied, 382 U.S. 841, 86 S.Ct. 41, 15 L. Ed.2d 82 (1965).

Major disputes arise over changes in rates of pay, rules and working conditions where the method of change is not provided in the existing labor contract. E. g., Elgin, supra. Minor disputes are those regarding the application or interpretation of existing collective bargaining contracts. E. g., St. Louis, S. F. & T. R. Co. v. Railroad Yardmasters, 328 F.2d 749 (5th Cir.), cert. denied, 377 U.S. 980, 84 S.Ct. 1886, 12 L.Ed.2d 748 (1964); Rutland Ry. Corp. v. Brotherhood of Locomotive Eng., 307 F.2d 21 (2d Cir. 1962), cert. denied, 372 U.S. 954, 83 S.Ct. 949, 9 L.Ed.2d 978 (1963).

In this case REA proposed implementation of 17 OTR runs. The parties could not agree on the manner and method of implementation, and upon BRAC’s refusal to arbitrate REA unilaterally implemented the runs. As a consequence of such action, various changes in pay basis, hours of service, layovers, domicile, and seniority rights obtained. REA’s position is that Rule 8 and its accompanying Memorandum of Understanding make provision for such changes and that accordingly any dispute aising out of the proposed runs is minor. BRAC’s view is that by the terms of the Memorandum Rule 8 applies only to changes resulting from implementation of “new runs,” and of the 17 runs in issue only one is “new” while the other 16 constitute restructured existing runs. Moreover, BRAC says that even if all 17 of the runs are “new” within the meaning of the Memorandum there is no method prescribed therein for settling disputes over changes in seniority rights, domicile, layovers, and the specific compensation paid drivers as distinguished from the basis thereof.

The District Court accepted BRAC’s characterization that neither Rule 8 nor the Memorandum governs restructured OTR runs and found that of the 17 proposed runs 16 were restructured and that as far as those 16 were concerned a major dispute was involved. Put shortly, we cannot agree that 16 of the 17 proposed runs definitely fall without the ambit of Rule 8 and its accompanying Memorandum. In United Industrial Workers etc. v. Board of Trustees, 351 F.2d 183, 188 (5th Cir. 1965), Chief Judge Brown aptly stated the test for determining whether a particular dispute is major or minor:

At the outset several things may be briefly emphasized. The first is, of course, that if by its terms of reasonable implication therefrom, the collective agreement apparently affords some arguable basis for the action, the interpretation of the contract, the question of who is right — Carrier or Union — -is for determination by the Railroad Adjustment Board, a Court having jurisdiction only to mold equitable relief to preserve the status quo pending Adjustment Board decision.

(footnotes omitted).

The key word in this test is “arguable.” If the court finds an arguable basis it must defer to the expertise of the Adjustment Board. The District Court denied the existence of such a basis, holding, as noted above, that the plain meaning of the Memorandum distinguishes between “new” as opposed to “existing” runs. In our view it is clear that there is no such plain meaning. The first sentence of the Memorandum states:

It is agreed and understood that under the application of Rule 8 existing over-the-road truck runs will continue to operate in accordance with Article IX of the September 1, 1949 Agreement.

That sentence could mean that no changes in working conditions on runs in existence on the effective date of the contract can be made without negotiation of a new contract unless the runs themselves are restructured, in which case they become “new runs” governed by the special provisions of Rule 8 and of the Memorandum. We in no way intimate that the above interpretation is correct, but merely note that it is arguably so. It may be that the correct construction is that of the District Court, or the possible construction noted above, or one different from either. The true meaning of the Rule and of the Memorandum is the grist of arbitration.

Having found that there is an arguable basis for invoking Rule 8 and its provision for suspending the terms of Rules 4, 5, 6 and 9, we find that any dispute over hours of service (Rule 4), basis of pay (Rule 9), holidays (Rule 6), and overtime (Rule 5) arising out of implementation of the 17 proposed runs is minor.

BRAC falls back to the position that even if Rule 8 is applicable it does not contemplate changes in seniority, domicile, layovers, and specific compensation as distinguished from a basis thereof. The District Court did not reach this issue. We again point out that controversy over such changes constitutes a minor dispute if provisions for settling such a dispute are arguably contained within the collective bargaining agreement. Rule 8 establishes the method by which changes in rates of pay, overtime and hours of service are to be made when such are called for in connection with implementation of a new OTR run. With respect to the dispute over compensation, we hold that changing from a “trip rate” to an “hourly rate” is arguably a change in basis of pay within the scope of Rule 8. In regard to changes in seniority and domicile Rule 12¹ (Transfers and Consolidations) arguably applies. That rule provides a method (similar to that in Rule 8) for settling seniority disputes arising out of the transfer of “positions . . . from one seniority district to another. ... ²

Moreover, the Memorandum of Understanding as to the applicability of Rule 8 states that the procedure for establishing “ [a] rrangements concerning operation of new runs” is set out therein. Arguably the word “arrangements” includes seniority, domicile, layovers, and compensation. Therefore, any dispute over such arrangements is minor.

In sum, all changes which result from implementation of the 17 runs are arguably governed by Rule 8, by its accompanying Memorandum, or by Rule 12. Accordingly, the entire dispute is minor.³

REA asks that this court issue an arbitration order. The parties, by their action leading up to this litigation, have made it clear that there is no possibility of a negotiated settlement. Since the dispute is minor, REA has the right to institute compulsory arbitration. To ensure that arbitration is had forthwith we direct the court below to vacate its finding that the dispute is major and to issue an order to arbitrate. The District Court was careful to point out that a status quo order rescinding REA’s unilateral implementation of the 17 proposed runs might cause far greater irreparable harm to REA than to BRAC. We agree. Having found the dispute to be minor, issuance of a status quo order becomes discretionary. See Detroit & Toledo Shore Line, supra; Itasca Lodge 2029, of Broth, of Ry. and S. S. Clerks, etc. v. REA, supra; Switchmen’s Union v. Central of Georgia Ry. Co., swpra. Therefore, on the basis of the reasons set out by the District Court in support of its stay of its own status quo order pending this appeal, we direct that the entire status quo order be vacated.⁴

Reversed and remanded with directions.

1 . Rule 12(a) provides in full:

“(a) This Agreement recognizes that two or more offices or departments may be consolidated and/or positions or work involving a position may be transferred from one seniority district to another after conference and agreement between the Management and the duly accredited representatives of the employees. In the event of failure to make an agreement within sixty (CO) days after notice is given to the General Chairman or General Chairmen representing the employees to be affected by the contemplated change, the matter may be referred by either party to final and binding resolution in accordance with Sections 3 and/or 7 of the Railway Labor Act as amended. The issues submitted for such determination shall not include any question as to the right of the Company to make the change but shall be confined to the manner of implementing the contemplated change.”

In addition subsections (b) through (e) of the Rule contemplate and provide for changes in domicile by employees who move in order to protect their seniority rights.

2 . That Rule 32 arguably governs any change in seniority rights caused by implementation of the 17 runs here at issue is best shown by example. Prior to REA’s proposal there was an OTR run between Philadelphia and Pittsburg with slip-seating occurring at Breezewood, Pennsylvania, the boundary line between the Philadelphia and Pittsburg seniority districts. Thus under the old run a driver with seniority in Philadelphia handled the leg from Philadelphia to Breezewood while another driver with seniority in Pittsburg drove the other leg. Under the REA proposal, all drivers would be based in Pittsburg. Arguably, the “position” (within the meaning of Rule 32) of the driver from Philadelphia to Breezewood has been transferred to the Pittsburg seniority district. Pursuant to Rule 12, then, all the drivers formerly based in Philadelphia would have the right to transfer to Pittsburg and to maintain their seniority rights. Accordingly, any seniority dispute over implementation of the Philadelphia-Pittsburg run is minor. The same logic applies to the other runs.

3 . The District Court after finding that the dispute was major, reasoned further that “even if this [finding] * * * is wrong [REA] nevertheless cannot prevail on its contention that the agreement (memorandum) authorizes what it has unilaterally done.” This statement by the trial judge does not relate to the question of whether the dispute is major or minor but rather to the issue of REA’s power to implement the new runs upon BRAC’s refusal to arbitrate even assuming BRAC was required to arbitrate. Having found that the entire dispute is minor, in that nil of the changes incumbent on implementation of the proposed runs are arguably governed by contract provisions, we find authority for REA’s action in Board of Locomotive Firemen and Ehginemen v. Southern Pacific Co., 447 F.2d 1327 (5th Cir. 1971), and in St. Louis, S.F. & T. Ry. Co. v. Railroad Yardmasters, 328 F.2d 749 (5th Cir.), cert. denied, 377 U.S. 980, 84 S.Ct. 1886, 12 L.Ed.2d 748 (1964).

4 . Tlie Detroit & Toledo Shore Line ease in no way forbids our denial of status quo. That case, as Judge Ainsworth has noted in United Transportation Union v. Georgia Railroad, 452 F.2d 226 (5th Cir., 1971) mandates “that the status quo be maintained between labor and management, the union and the railroad here, while a ‘major dispute’ between the parties is being resolved in accordance with the terms of the [Railway Labor] Act.” In this case we have found a “minor dispute,” and accordingly we are free to refuse a status quo order.