United States District Court, Western District of New York
June 14, 1991
CSX TRANSPORTATION, INC., PLAINTIFF,
UNITED TRANSPORTATION UNION, F.A. HARDIN, J.A. CIANCIOTTI, R.W. EARLY, UNITED TRANSPORTATION UNION, YARDMASTERS DEPARTMENT, B.R. CARVER, RICHARD P. DEGENOVA, AMERICAN TRAIN DISPATCHERS ASSOCIATION, R.J. IRVIN, HUGH E. MARTIN, BROTHERHOOD OF LOCOMOTIVE ENGINEERS, L.D. MCFATHER, J.A. LECLAIR, BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYEES, G.N. ZEH, B.J. TWIGG, TRANSPORTATION COMMUNICATIONS INTERNATIONAL UNION, R.D. KILROY, DWIGHT A. VANCE, L.H. TACKETT, TRANSPORTATION COMMUNICATIONS INTERNATIONAL UNION, C.E. WHEELER, M.L. CRAWFORD, INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, J.F. PETERPAUL, A.J. SARCONE, W.D. SNELL, INTERNATIONAL BROTHERHOOD OF FIREMEN AND OILERS, J.L. WALKER, D.S. ANDERSON, SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, D.C. BUCHANAN, A.R. HICKS, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, E.P. MCENTEE, GEORGE L. LAITILE, BROTHERHOOD OF RAILROAD SIGNALMEN, V.M. SPEAKMAN, JR., C.T. GREEN, DEFENDANTS. AMERICAN TRAIN DISPATCHERS ASSOCIATION, BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYEES, BROTHERHOOD OF RAILROAD SIGNALMEN, INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, INTERNATIONAL BROTHERHOOD OF FIREMEN AND OILERS, SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, AND TRANSPORTATION COMMUNICATIONS INTERNATIONAL UNION (TCU), PLAINTIFFS, V. CSX TRANSPORTATION UNION, DEFENDANT.
The opinion of the court was delivered by: Curtin, District Judge.
The parties to the present actions are CSX Transportation,
Inc. ("CSXT"), a "carrier" within the meaning of the Railway
Labor Act ("RLA"), 45 U.S.C. § 151, First, and the United
Transportation Union ("UTU") and American Train Dispatchers
Association ("ATDA"), as well as other unions and individuals
(hereinafter collectively referred to as the "Unions"), all of
whom are "representatives" of former CSXT rail employees within
the meaning of the RLA, 45 U.S.C. § 151, Sixth. They have been
before this court previously. Decker v. CSX Transp., Inc.,
672 F. Supp. 674 (1987) ("Decker I"), vacated, 688 F. Supp. 98
(W.D.N.Y. 1988), aff'd sub nom., CSX Transp., Inc. v. United
Transp. Union, 879 F.2d 990 (2d Cir. 1989), cert. denied, ___
U.S. ___, 110 S.Ct. 720, 107 L.Ed.2d 740 (1990) ("Decker II").
These prior cases have outlined in extensive detail the factual
background leading to the present disputes. See id. However, a
brief review of that background is also in order here.
CSXT owns and operates approximately 21,000 miles of rail
line. The prior and present disputes both arise from CSXT's
efforts to sell 369 miles of rail line between Buffalo, New
York, and Eidenau, Pennsylvania. CSXT sought to sell that line
because of its marginal profitability shortly after acquiring
it in 1987 from the Baltimore & Ohio Railroad ("B & O"), which
had been merged into CSXT. As a result of that merger, CSXT
assumed responsibility for all collective bargaining agreements
that had existed between the former B & O and the Unions
representing employees on the Buffalo-Eidenau line.
On September 16, 1987, CSXT entered into a letter of intent
to sell the Buffalo-Eidenau line to a newly formed corporation,
Buffalo & Pittsburgh Railroad, Inc. ("B & P"). As a corporation
not previously in the railroad business, B & P was not
statutorily required to employ, or to enforce the collective
bargaining agreements of, any of the 226 former CSXT employees
of the Buffalo-Eidenau line. Decker II, 688 F. Supp. at 101-02.
Under its sales agreement with CSXT, however, B & P did pledge
to offer jobs to at least 160 of those former employees, albeit
on different terms. Id. at 101.
Given the significant loss of jobs which would result from
the sale, and the potentially less favorable employment terms
for those jobs that remained, the Unions sought to prevent the
sale until bargaining between the Unions and CSXT over the
effects of the sale could be completed. Accordingly, just prior
to the signing of the letter of intent to sell, the Unions
served notices on CSXT pursuant to RLA § 6, 45 U.S.C. § 156,
seeking "an intended change in agreements affecting rates of
pay, rules, or working conditions." Id. By filing these
notices, the Unions sought to amend their then-existing
collective bargaining agreements with CSXT to include or
strengthen labor-protective provisions during a line sale. The
Unions acknowledged that these agreements did not provide
sufficient labor protections in the event of a sale. See Decker
II, 879 F.2d at 1000.*fn1
To understand the Unions' actions, we must digress briefly to
explain the importance of § 6 in the structure of the railroad
industry's labor-management relations. In the railroad
industry, new collective bargaining agreements are not always
negotiated according to a predetermined schedule. Cf.
Burlington Northern R.R. v. Brotherhood of Maintenance of Way
Employes, 481 U.S. 429, 432, 107 S.Ct. 1841, 1844, 95 L.Ed.2d
381 (1987). Instead, the Railway Labor Act offers § 6,
45 U.S.C. § 156, which enables either party at any time, by filing
the proper notice, to initiate negotiations over newly proposed
provisions to such collective bargaining agreements. Section 6
then triggers an "elaborate machinery for negotiation,
mediation, voluntary arbitration, and conciliation" between the
parties. Detroit & Toledo Shore Line R.R. v. United Transp.
Union, 396 U.S. 142, 148-49, 90 S.Ct. 294, 298-99, 24 L.Ed.2d
325 (1969). See also id. at 149 n. 14, 90 S.Ct. at 298 n. 14
(detailing negotiation steps). Most importantly for labor,
however, until such negotiations are complete, § 6 requires
preservation of the status quo.
In every case where such notice of intended change
has been given, . . . rates of pay, rules, or
working conditions shall not be altered by the
carrier until the controversy has been finally
acted upon as required by section 155 of this
title, by the Mediation Board. . . .
RLA § 6, 45 U.S.C. § 156 (emphasis added). This status quo
obligation extends also to the unions, who may not strike
during negotiation periods. Shore Line, 396 U.S. at 149-50, 90
S.Ct. at 298-99. In this way, Congress established a framework
to stabilize the often volatile labor-management relations in
the railroad industry. Chicago & Northwestern Transp. Co. v.
Railway Labor Executives' Ass'n, 855 F.2d 1277, 1281 (7th
Cir.), cert. denied, 488 U.S. 966, 109 S.Ct. 493, 102 L.Ed.2d
After filing § 6 notices, the Unions then filed suit in state
court, subsequently removed to this court, to enjoin CSXT from
altering the status quo until it had bargained with the Unions
over the effects of the sale on CSXT's employees. CSXT defended
this suit on two grounds: first, that moratorium provisions in
the collective bargaining agreements barred suit, Decker II,
688 F. Supp. at 102 & n. 4, and second, that the line sale was
subject to the exclusive jurisdiction of the Interstate
Commerce Commission ("ICC"), thus rendering the RLA
inapplicable. Id. at 102. This court initially dismissed this
suit on the ground that the ICC's jurisdiction preempted the
RLA. Decker I, 672 F. Supp. 674, vacated, 688 F. Supp. 98. This
decision was later vacated on motion by the Unions. Decker II,
688 F. Supp. at 107-09, aff'd, 879 F.2d 990. Before this
court could reconsider that question, however, CSXT filed suit
in this court seeking a declaratory judgment that it had no
statutory obligation to bargain with the Unions prior to the
line sale, and an injunction against Union self-help, including
strikes. The Unions counter-claimed, again asking that the
status quo be maintained and the sale enjoined until the RLA's
dispute resolution procedures could be exhausted. See Decker
II, 688 F. Supp. at 103.*fn2
At that stage of the controversy, once this court had
concluded that the labor protection provisions of the RLA were
not preempted by the Interstate Commerce Act ("ICA"),
Decker II, 688 F. Supp. at 107-09, aff'd, 879 F.2d 990, the main
question was whether the line sale and attendant layoffs of
union employees on the Buffalo-Eidenau line was a "major" or
"minor" dispute under
the RLA. Id. at 109-12, aff'd, 879 F.2d at 995-1002.
There are two very different dispute resolution procedures
under the RLA. Although the statute does not mention them, the
Supreme Court has labelled them "major" and "minor."
The first ["major"] relates to disputes over the
formation of collective agreements or efforts to
secure them. They arise where there is no such
agreement or where it is sought to change the
terms of one, and therefore the issue is not
whether an existing agreement controls the
controversy. They look to the acquisition of
rights for the future, not to assertion of rights
claimed to have vested in the past.
The second class ["minor"], however,
contemplates 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 either case the claim is to rights
accrued, not merely to have new ones created for
Elgin, Joliet & Eastern Ry. v. Burley, 325 U.S. 711, 723, 65
S.Ct. 1282, 1290, 89 L.Ed. 1886 (1945). See also Consolidated
Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299,
302-07, 109 S.Ct. 2477, 2479-83, 105 L.Ed.2d 250 (1989).
"[M]ajor disputes seek to create contractual rights, minor
disputes to enforce them." Id. at 302, 109 S.Ct. at 2480. Major
disputes are governed by § 2, Seventh, and § 6 of the RLA and
require extensive negotiation and mediation. Id. See also
Brotherhood of R.R. Trainmen v. Jacksonville Terminal Co.,
394 U.S. 369, 378, 89 S.Ct. 1109, 1115, 22 L.Ed.2d 344 (1969)
(explaining steps for resolution of major dispute). The parties
may not resort to the use of economic force unless these
extensive procedures conclude without agreement. Consolidated
Rail, 491 U.S. at 303, 109 S.Ct. at 2480. Minor disputes are
governed by § 2, Sixth, and § 3, First(i), of the RLA, which
compels binding arbitration between the parties. Id.
The Unions argued this dispute was major because they were
seeking, by filing § 6 notices, to add new labor-protective
provisions to their collective bargaining agreements with CSXT.
CSXT argued the dispute was minor because, rather than
requiring new collective bargaining terms, the line sale and
attendant layoffs of union members was permitted by the
existing agreements. CSXT was not required to prove this
contractual defense argument. Id. at 307, 109 S.Ct. at 2482-83;
Decker II, 879 F.2d at 997-98. This question would be settled
by arbitration. Consolidated Rail, 491 U.S. at 303, 109 S.Ct.
at 2480. CSXT needed only to show that its alleged contractual
justification for selling the line without bargaining was not
"obviously insubstantial." Id. at 306-07, 109 S.Ct. at 2482-83;
Decker II, 879 F.2d at 997. Absent even a plausible contractual
justification for selling the line without prior effects
bargaining with the Unions, the dispute would have been
"major," and could not have gone forward until such effects
bargaining was complete. Consolidated Rail, 491 U.S. at 302-03,
307, 109 S.Ct. at 2479-80, 2482-83; Decker II, 879 F.2d at 1003
n. 9; General Comm. of Adjustment, United Transp. Union v. CSX
R.R., 893 F.2d 584, 591 (3d Cir. 1990).
This court held that the dispute between the Unions and CSXT
was "minor" because
a plausible interpretation of the collective
bargaining agreements in effect between CSXT and
the defendant unions would provide a substantial
contractual justification for the sale of the
Buffalo-Eidenau line without additional bargaining.
Decker II, 688 F. Supp. at 112 (emphasis added). The court based
its conclusion on an evaluation of reduction-in-force ("RIF")
clauses in CSXT's collective bargaining agreements*fn3
past practices of CSXT
with respect to line sales. Decker II, 688 F. Supp. at
Accordingly, the dispute was subject to binding
arbitration before the National Railroad Adjustment Board,
pursuant to RLA § 3, First, 45 U.S.C. § 153, First, or a
special adjustment board established by the parties pursuant to
RLA § 3, Second, 45 U.S.C. § 153, Second. Decker II, 688
F. Supp. at 112.
It must be stressed that this holding was based on the
carrier's contractual defense to the Unions' efforts to
preserve the status quo through § 6's major dispute resolution
procedures. CSXT was the party seeking arbitration, not the
Unions. Id. at 109. As such, the burden to show this was a
minor dispute, although slight, was on the carrier.
Consolidated Rail, 491 U.S. at 307, 109 S.Ct. at 2482-83;
Decker II, 879 F.2d at 999. This burden remained with the
carrier during arbitration. Id. at 1003. See infra Part I(B).
Upon holding the dispute to be minor, this court then filed
an order enjoining the Unions from engaging in strikes or other
activity to prevent the line sale. The order also required CSXT
to bargain with the Unions over the effects of the sale
pursuant to the Unions' § 6 notices, 45 U.S.C. § 156, and
permitted the line sale to proceed, subject to a stay during
application for appeal. See Decker II, 879 F.2d at 994.
The decision and order were appealed by the Unions to the
Second Circuit, which stayed the sale pending expedited review.
Id. at 994-95. After oral argument the court lifted the stay on
July 18, 1988, and the line was sold to B & P on July 19, 1988.
While the appeal to the Second Circuit was pending, on July
15, 1988, CSXT and the Unions agreed to the establishment of a
special adjustment board ("Board"), to which they submitted
their dispute pursuant to RLA § 3, Second, 45 U.S.C. § 153,
Second. On December 15, 1988, the Board concluded that neither
the language of any collective bargaining agreement between the
parties, nor past practice, contractually authorized a sale of
the Buffalo-Eidenau line by CSXT without bargaining over the
effects of the sale on employees working on that line. Decker
II, 879 F.2d at 995.
Upon issuance of the arbitration decision, CSXT and the
Unions took divergent paths. The Unions moved the Second
Circuit, which as of that time had not issued an opinion, to
vacate this court's decision "`[s]ince there is no longer a
basis for concluding that appellee [CSXT] has a contractual
right to abolish jobs without first bargaining.'" Id. CSXT, on
the other hand, initiated suit in this court challenging the
findings of the Board on the ground that it exceeded its
jurisdiction. CSX Transp., Inc. v. United Transp. Union,
The Second Circuit then issued its opinion, on June 7, 1989,
agreeing with this court's decision in Decker II. Decker II,
879 F.2d at 1002. CSXT's proposed contractual defense was
"plausible," and not "obviously insubstantial," and thus the
dispute was minor. Decker II, 879 F.2d at 999. In reaching this
conclusion, the court relied primarily on its interpretation of
RIF provisions in CSXT's collective bargaining agreements,
rather than CSXT's past practice during line sales. Id. at
As part of its decision, the Second Circuit went on to
discuss the effect of the arbitration award. The court denied
the Unions' motion to vacate this court's prior decision,
noting that there was no conflict between this court's
determination that CSXT had a "plausible" contractual defense
and the Board's determination that CSXT's "position, although
`arguable' and `plausible,'
was, on careful analysis, unavailing." Id. at 1003 & n. 9.
After the Second Circuit's rejection of the Unions' motion,
the Unions filed suit in this court, American Train Dispatchers
Ass'n v. CSX Transp., Inc., CIV-90-481C ("ATDA"), asking the
court to remand the original dispute to the Board to fashion a
remedy in line with its decision. ATDA, Item 1. The Board's
"award" stated only that: "The questions set before the Board
are disposed of as provided in the Findings and Conclusions
herein." CSXT, Item 1, Exh. C at 26; Decker II, 879
F.2d at 1002. Currently pending is the Unions' motion to amend
their answer in CSXT to seek this same relief as a counterclaim
to CSXT's 1988 suit. CSXT, Item 30. CSXT has moved to strike
this suit and amended answer, arguing that the Unions should
have asserted this claim as a compulsory counterclaim to its
1988 suit. See ATDA, Item 14 at 7-13.
Thus, the controversy as it now stands before this court is
1) Did the Board exceed its jurisdiction in
holding that CSXT's contractual defense
arguments, although plausible, were ultimately
2) If the Board did not exceed its jurisdiction,
should the Unions be nonetheless barred from
bringing their action asking this court to
fashion an order out of the Board's decision
because the Unions should have brought this
action as a compulsory counterclaim to CSXT's
3) If the Unions are not so barred, what order
should this court frame out of the Board's
I. DID THE BOARD EXCEED ITS JURISDICTION?
The first issue to be considered is whether the Board
exceeded its jurisdiction in rendering its decision of December
15, 1988. See CSXT, Item 1, Exh. C (Special Board of Adjustment
No. 1018 decision) (hereinafter "Award").
Before proceeding further, it must be noted that the
jurisdiction of this court to review arbitration decisions
under the RLA is limited.
The court shall have jurisdiction to affirm the
order of the [Board] or to set it aside, in whole
or in part, or it may remand the proceeding to the
[Board] for such further action as it may direct.
On such review, the findings and order of the
[Board] shall be conclusive on the parties, except
that the order of the [Board] may be set aside, in
whole or in part, or remanded to the [Board], 
for failure of the [Board] to comply with the
requirements of this chapter,  for failure of
the order to conform, or confine itself, to matters
within the scope of the [Board's] jurisdiction, or
 for fraud or corruption by a member of the
[Board] making the order.
45 U.S.C. § 153, First (q) (emphasis added). See Consolidated
Rail, 491 U.S. at 304, 109 S.Ct. at 2481; Decker II, 879 F.2d
CSXT argues that the Board exceeded its jurisdiction in four
ways. First, it formulated and decided an issue not put before
it. Second, the Board's conclusion that CSXT's contractual
defense was unavailing was based, not on CSXT's agreements or
past practices, but on the Board's interpretation of the
Unions' statutory rights under the RLA. Third, the Board's
award was not based on the terms of collective bargaining
agreements between the parties. Fourth, the Board attempted to
rewrite the parties' agreements by effectively writing a
limitation into them that RIF provisions do not apply to job
abolishments which result from line sales. CSXT, Item 15 at
A. Did the Board Decide an Issue Not Put Before It?
CSXT argues first that the Board framed and decided an issue
not put before it by either party.
The Board was established pursuant to RLA § 3, Second,
45 U.S.C. § 153, Second, by a Memorandum of Agreement dated July
15, 1988, between CSXT and the Unions.
CSXT, Item 1, Exh. A. The parties agreed that
This Board will have authority to the same extent
that the National Railroad Adjustment Board
["NRAB"] would have had authority to hear and
decide issues submitted by the Carrier [CSXT] and
the Organizations [Unions] arising from the sale
by the carrier of its line of railroad between
Buffalo, New York and Eidenau, Pennsylvania.
CSXT, Item 1, Exh. A, ¶ 1. The parties also agreed to "furnish
each other the issues they will submit to the Board," id., ¶
15, and that "[u]pon the execution of this agreement, the
submissions by the Carrier to the National Railroad Adjustment
Board ["NRAB"] will be deemed withdrawn and submitted to the
Special Board established by this agreement." Id., ¶ 14.*fn5
Both parties submitted issues to the Board. CSXT submitted
three issues to the Board, only the first of which concerns us
1. Have the Organizations sustained their burden
of proof that the Carrier does not have the
unilateral right, under its existing collective
bargaining agreements and past practices, to
dispose of its rail lines between Buffalo, New York
and Eidenau, Pennsylvania?
Award at 2 (emphasis added). The Unions submitted seven issues
for Board resolution, none of which is directly at issue here.
Award at 3. CSXT framed its first issue close to, but not
identical with, the way it identified the issue before the NRAB
prior to its agreement to submit to expedited arbitration under
RLA § 3, Second, 45 U.S.C. § 153, Second. CSXT framed that
question as follows: "Does the Carrier have the unilateral
right to dispose of property without bargaining under the
existing Agreement and past practice?" CSXT, Item 5-A, Exh. A
(emphasis added). This court identified the issue very
similarly in its decision of May 26, 1988.
The dispute between CSXT and its employees, in
very basic terms, comes down to whether the
carrier has the unilateral right to sell one of
its less profitable line operations, and thereby
abolish all CSXT positions on that line, without
bargaining with the unions about protections for
its employees who will be affected by that sale.
Decker II, 688 F. Supp. at 110.*fn6
In seeking to formulate the issues before it, the Board tried
to reconcile the parties' "disparate approaches to the
dispute," Award at 2, and also looked to this court's opinion
in Decker II, which the Board noted formed "the genesis of its
jurisdiction." Id. at 4. Drawing these different formulations
together, the Board concluded that three issues, only the first
of which is in dispute here, see CSXT, Item 14 at 15, fairly
encompassed the dispute:
1. Did the Carrier have the unilateral right,
under existing collective bargaining provisions or
past practice, to abolish its positions in
connection with the sale of the Buffalo-Eidenau
Line without first negotiating with the
Organizations as to the affected employees?
Award at 5.
Plaintiff CSXT correctly asserts that "`arbitration is a
matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit.'"
AT & T Technologies, Inc. v. Communications Workers,
475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986) (quoting
United Steel-workers v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 582, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409 (1960)). And,
further, that "[w]hile an arbitrator has broad power to fashion
remedies on issues the parties
have empowered him to resolve, . . . he lacks authority to
decide questions the parties have not agreed to submit to him."
Courier-Citizen Co. v. Boston Electrotypers Union No. 11,
702 F.2d 273, 281 (1st Cir. 1983). See also International Chem.
Workers Union, Local No. 566 v. Mobay Chem. Corp.,
755 F.2d 1107, 1110 (4th Cir. 1985) ("The parties, not the arbitrator,
must define the issues. The submission is `the source and
limit' of the arbitrator's power."); Frederick Meiswinkel, Inc.
v. Laborer's Union Local 261, 744 F.2d 1374, 1377 (9th Cir.
1984), cert. denied, 470 U.S. 1028, 105 S.Ct. 1394, 84 L.Ed.2d
Nevertheless, "the presumption of authority that attaches to
an arbitrator's award applies with equal force to his decision
that his award is within the submission." Johnston Boiler Co.
v. Local Lodge No. 893, 753 F.2d 40, 43 (6th Cir. 1985). See
also Vic Wertz Distrib. Co. v. Teamsters Local 1038,
898 F.2d 1136, 1139 (6th Cir. 1990). Courts should defer to an
arbitrator's interpretation of a submission, the Third Circuit
has argued, for three reasons, the first and third of which
support deference here. Mobil Oil Corp. v. Independent Oil
Workers Union, 679 F.2d 299, 302 (3d Cir. 1982). First,
"plenary judicial review of arbitration submissions undermines
the congressional policy in favor of expeditious and relatively
inexpensive means of settling grievances, and thus of promoting
labor peace." Id.*fn7 Third, judicial deference lessens the
burden on courts to determine the exact scope of arbitration
submissions. Id. Other courts have also supported this policy.
See, e.g., In re Marine Pollution Serv., Inc., 857 F.2d 91, 94
(2d Cir. 1988); Kurt Orban Co. v. Angeles Metal Systems,
573 F.2d 739, 740 (2d Cir. 1978); Mobil Oil Corp., 679 F.2d at 302
n. 1 (listing cases); International Ass'n of Machinists &
Aerospace Workers, Dist. 776 v. Texas Steel Co., 639 F.2d 279,
283 (5th Cir. 1981).*fn8
Given these standards, the court concludes that the Board in
this case did not exceed its jurisdiction in framing the issue
as cited above. The question put before the Board by CSXT, in
its simplest phrasing, was whether CSXT had the unilateral
right, under existing agreements and past practices, to dispose
of its rail lines. Compare Award at 2 (CSXT submission to
Board) with CSXT, Item 5-A, Exh. A (CSXT submission to NRAB).
This question necessarily includes an inquiry into whether CSXT
had the unilateral right to abolish positions on those lines.
See Award at 5 (Board statement of issue). CSXT argues
extensively, though, that the Board's addition of the phrase
"without first negotiating" to CSXT's characterization of the
issue exceeded its authority. See id. The court finds, however,
that there is no essential difference between the Board's and
CSXT's phrasings of the question. The Unions did not challenge
CSXT's right, under its then-existing collective bargaining
agreements, to dispose of its rail lines. Decker II, 688
F. Supp. at 109. Were this the only question CSXT sought to
arbitrate, there would have been no need to arbitrate. The
issue CSXT put before the Board would have been meaningless.
What the Unions did challenge in this court was CSXT's right
to dispose of its rail lines without bargaining over the
effects of that sale on Union members once the Unions had filed
§ 6 notices to bargain. Decker II, 688 F. Supp. at 102. CSXT was
granted its request to arbitrate this question, however,
because it had a plausible argument that this question could be
settled by interpretation of its contracts with the Unions. Id.
at 112. In other words, CSXT was permitted to arbitrate the
question whether it had the right, by contract,
to dispose of its lines without bargaining. Id. at 110. Despite
CSXT's arguments to the contrary, this is simply the same
question CSXT put before the Board: whether CSXT had the
unilateral right — a right independent of any bargaining
rights the Unions might have — under contract, to dispose of
its lines. See supra. The language of arbitration demands
should not be read so narrowly as to defeat an arbitration
award on semantic differences in the phrasing of an issue. Kurt
Orban, 573 F.2d at 740; Mobil Oil Corp., 679 F.2d at 303;
International Ass'n of Machinists, 639 F.2d at 283.
Accordingly, the Board did not exceed its jurisdiction in its
characterization of the issues submitted to it.
B. Did the Board Improperly Base Its Award on an
Interpretation of the Parties' Statutory Rights?
CSXT argues, second, that the Board's conclusion that CSXT's
contractual defense was unavailing was based, not on CSXT's
agreements or past practices, but on the Board's interpretation
of the Unions' statutory rights under the RLA.
It is manifest that an arbitrator may not base an award on an
interpretation of statutory rights. The arbitrator's role was
explained in detail by the Supreme Court in Alexander v.
Gardner-Denver Co., 415 U.S. 36, 53-54, 94 S.Ct. 1011, 1022, 39
L.Ed.2d 147 (1974).
As the proctor of the bargain, the arbitrator's
task is to effectuate the intent of the parties.
His source of authority is the
collective-bargaining agreement, and he must
interpret and apply that agreement in accordance
with the "industrial common law of the shop" and
the various needs and desires of the parties. The
arbitrator, however, has no general authority to
invoke public laws that conflict with the bargain
between the parties:
"[A]n arbitrator is confined to interpretation
and application of the collective bargaining
agreement; he does not sit to dispense his own
brand of industrial justice. He may of course
look for guidance from many sources, yet his
award is legitimate only so long as it draws its
essence from the collective bargaining
agreement. When the arbitrator's words manifest
an infidelity to this obligation, courts have no
choice but to refuse enforcement of the award."
United Steelworkers of America v. Enterprise
Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct.
1358, 1361, 4 L.Ed.2d 1424 (1960).
If an arbitral decision is based "solely upon the
arbitrator's view of the requirements of enacted
legislation," rather than on an interpretation of
the collective-bargaining agreement, the
arbitrator has "exceeded the scope of the
submission," and the award will not be enforced.
Ibid. Thus the arbitrator has authority to resolve
only questions of contractual rights. . . .
See also McDonald v. City of West Branch, 466 U.S. 284
104 S.Ct. 1799, 1803-04, 80 L.Ed.2d 302 (1984); Barrentine v.
Arkansas-Best Freight System, 450 U.S. 728
, 744, 101 S.Ct.
1437, 1446-47, 67 L.Ed.2d 641 (1981); Roadmaster Corp. v.
Production & Maintenance Employees' Local 504, 851 F.2d 886
889 (7th Cir. 1988). Further, at least one arbitration board's
decision has been struck down for interpreting contract
language in light of its view of the requirements of the RLA.
International Ass'n of Machinists & Aerospace Workers v. Alaska
Airlines, Inc., 1988 WL 235478 (W.D.Wash. Aug. 9, 1988).
Plaintiff devotes portions of no less than five briefs
arguing that the Board improperly based its award on statutory
interpretation. CSXT, Item 15 at 28-37, Item 25 at 6-17, Item
26 at 1-6, Item 28 at 6-12, Item 29 at 1-4. The essence,
however, of plaintiff's argument can be found in its first
brief. CSXT, Item 15 at 29-32. Plaintiff argues that it placed
before the Board four categories of evidence to prove it was
entitled by contract to sell the Buffalo-Eidenau line without
(1) the express language in the force reduction
provisions; (2) the bargaining history of those
provisions; (3) CSXT's past practice of applying
those provisions to the abolishment of jobs,
including abolishments resulting from nine prior
line sales; and (4) the many arbitration
precedents holding that a carrier has the
management right to abolish unneeded positions in
the absence of limitations on that right contained
in collective bargaining agreements.
Id. at 29.
Despite this evidence, and despite the fact that the Board
did not disagree with this evidence, the Board found it "not
dispositive" of the issue before it. Award at 17. Instead,
plaintiff argues, the Board found dispositive the
statutory rights of the Unions and the fact that the Unions had
not waived these rights in their collective bargaining
agreements or during past line sales. In support of this
argument, plaintiff quotes extensively from the Board's
opinion. See CSXT, Item 15 at 30-31. One of the Board's
conclusions encapsulates plaintiff's point. The Board
Thus, it is clear that there is nothing in these
agreements which prohibits the sale of the
Carrier's assets; the Carrier is free to do so,
and the Organizations do not disagree. It is
equally clear, however, that there is nothing in
these agreements that waives the right of the
Organizations to invoke their statutory rights to
bargain over the effects of such sale on the
employees they represent.
Award at 18 (emphasis added). Thus, the Board, plaintiff
argues, based its decision denying CSXT's contractual defense
"`solely upon the arbitrator's view of the requirements of
enacted legislation,' rather than on an interpretation of the
collective-bargaining agreement. . . ."
Gardner-Denver, 415 U.S. at 53, 94 S.Ct. at 1022 (quoting
Enterprise Wheel & Car Corp., 363 U.S. at 597, 80 S.Ct. at
Plaintiff's arguments are unavailing. To arrive at this
conclusion, we must look at the Board's decision in the
procedural context of this case. It is important to note that
the first thing the Board determined, before it even reviewed
CSXT's or the Unions' arguments, was that CSXT had the burden
to demonstrate that its contractual arguments — embodied in
existing collective bargaining agreements or past practices —
justified its unilateral right to abolish positions on its
Buffalo-Eidenau line. Award at 4. The Board based this
conclusion on its interpretation of the procedural posture of
the issue before it. See supra Part I(A).
CSXT was the party seeking arbitration. Decker II, 688
F. Supp. at 109. It sought arbitration as an affirmative defense
to the Unions' efforts to maintain the status quo through the
filing of § 6 notices. Id. It therefore carried the burden to
establish this defense. Consolidated Rail, 491 U.S. at 307, 109
S.Ct. at 2482-83; Decker II, 879 F.2d at 999; Chicago &
Northwestern Transp. Co. v. RLEA, 855 F.2d at 1283.
Accordingly, it was appropriate for the Board to require CSXT
to carry this burden during arbitration. See Decker II, 879
F.2d at 1003 & n. 9.
In this context, the Board was quite clear in the beginning
of its opinion that it did not base its conclusions upon an
interpretation of statutory rights.
It must be emphasized at the outset that this
Board does not include any determination of the
nature or extent of the [Unions'] asserted
statutory right, if any, to bargain; that
determination is properly before the courts. The
Board's inquiry is limited to a determination of
whether the parties' written agreements or past
practices (as alleged by the Carrier) entitled the
Carrier, as it claims, unilaterally to abolish
these positions in connection with the sale of one
of its lines.
Award at 15-16 (emphasis added).
The difficulty in this case is that there are issues of
statutory interpretation and of contractual interpretation, and
the two seem inextricably intertwined. The issue of statutory
interpretation was presented by the Unions in Decker II: Do the
Unions have the right under the RLA to pre-line sale
bargaining? Or, to restate this issue, do the Unions have the
right to delay the sale of a line under the status quo
provisions of § 6 once they have filed notice of "an intended
change in agreements affecting rates of pay, rules, or working
conditions," RLA § 6, 45 U.S.C. § 156, i.e., is it a "major"
court answered no. Decker II, 688 F. Supp. at 112, aff'd, 879
F.2d at 1002. This same conclusion has been reached by other
courts. See, e.g., General Comm. of Adjustment v. CSX R.R., 893
F.2d at 589-93; Chicago & Northwestern Transp. Co. v. RLEA, 855
F.2d at 1283-86. See also Decker II, 879 F.2d at 1001-02
(discussing analogous cases). This conclusion is always based,
however, on the railroad's "plausible" contractual defense.
Courts are not allowed to inquire whether that defense is in
fact meritorious. Id. at 1003; Maine Cent. R.R. v. United
Transp. Union, 787 F.2d 780, 782 (1st Cir.), cert.
denied, 479 U.S. 848, 107 S.Ct. 169, 93 L.Ed.2d 107 (1986);
Local 553, Transport Workers v. Eastern Air Lines,
695 F.2d 668, 675 (2d Cir. 1982). The interpretation of contracts is
left in the hands of arbitration boards. Decker II, 879 F.2d at
The contractual interpretation issue, on the other hand,
asks: Does the carrier have a contractual defense to the
Unions' "asserted statutory rights, if any, to bargain"? Award
at 16 (emphasis added). In other words, have the Unions in
their collective bargaining agreements waived their statutory
rights, whatever those might be? This is the issue the Board
decided in the negative. Award at 17, 20. It assumed, without
deciding, that the Unions had statutory rights to bargain over
the effects of a line sale and, looking solely at the
collective bargaining agreements and past practices, asked
whether such rights — whether or not they existed — had been
waived. See Award at 15-20. Contrary to what plaintiff argues,
this conclusion is not dependent on an interpretation of any
statute. The Board only decided that the parties, when they
drew up their labor contracts, did not intend that the
agreements' RIF provisions would apply to line sales. Award at
17. CSXT's Assistant Vice President Brenton Massie admitted as
much before the Board. Id. Similarly, the Board decided that
CSXT's past practices of selling or abandoning lines without
objection by the Unions had not attained contractual status.
Award at 18-20. Because CSXT carried the burden of establishing
its contractual defense, see supra, it was entirely appropriate
for the Board to base these conclusions on the absence of
evidence to the contrary. Award at 17-18, 20. This court cannot
disturb these conclusions. RLA § 3, First (q), 45 U.S.C. § 153,
First (q); Decker II, 879 F.2d at 1003.
These conclusions must be divorced, however, from the
statutory question, now before this court and discussed below,
which arises from them. That question asks what statutory
rights the Unions have in light of the failure of CSXT's
contractual defense. See infra Part III.
Accordingly, the Board interpreted contractual as opposed to
statutory rights and thus did not exceed its jurisdiction.
C. Did the Board Improperly Rewrite the Parties'
Plaintiff also argues that the Board's award improperly
attempted to rewrite the parties' agreements. CSXT, Item 15 at
Plaintiff correctly asserts that an arbitration board exceeds
the scope of its authority when it modifies, rewrites, or holds
contrary to "clear and unambiguous" contractual language.
Miller v. Chicago & North Western Transp. Co., 647 F. Supp. 1432,
1439 (N.D.Ill. 1986). See also United Food & Commercial
Workers Union, Local 1119 v. United Markets, Inc.,
784 F.2d 1413, 1415-16 (9th Cir. 1986) (arbitrator erred in
misinterpreting clear phrase "no longer"); Pacific Motor
Trucking Co. v. Automotive Machinists Union, 702 F.2d 176, 177
(9th Cir. 1983) (arbitrator ignored plain import of contract);
Baltimore & Ohio R.R. v. Brotherhood of Ry., Airline &
Steamship Clerks, 813 F.2d 1227, 108 (CCH) Lab.Cas. ¶ 10,261
(4th Cir. 1987), cert. denied, 484 U.S. 1008, 108 S.Ct. 705, 98
L.Ed.2d 656 (1988) ("Even a cursory reading of the relevant
sections of the [contract] would lead the reader to believe
that those practices which [the union] now challenges are
completely proper under the collective bargaining agreement.").
These cases, however, fail to establish the essential predicate
to plaintiff's argument: namely, that the collective bargaining
provisions at issue here were clear as applied
to line sales. Nothing in the RIF provisions cited by
plaintiff, see supra note 3, indicates whether the parties
intended these provisions to apply to line sales. The Board's
conclusion that the parties did not intend them to apply cannot
be second-guessed by this court. RLA § 3, First (q), 45 U.S.C. § 153,
Accordingly, the Board did not exceed its jurisdiction in
rendering its award.
II. SHOULD THE UNIONS BE PERMITTED TO AMEND THEIR
Plaintiff alternately argues that defendant Unions were
required to assert the claims they brought in ATDA,
CIV-90-481C, and which they now seek to add as counterclaims in
CSXT, CIV-88-1404C, under an amended answer currently pending
before this court, CSXT, Item 30, as compulsory counterclaims
to plaintiff's 1988 suit, and should thus be barred.
Fed.R.Civ.P. 13(a); Baker v. Gold Seal Liquors, Inc.,
417 U.S. 467, 469 n. 1, 94 S.Ct. 2504, 2506 n. 1, 41 L.Ed.2d 243 (1974)
("A counterclaim which is compulsory but is not brought is
thereafter barred."). Plaintiff argues that claims to enforce
arbitration awards are compulsory counterclaims to suits
challenging such awards. E.g., Burlington Northern, Inc. v.
American Ry. Supervisors Ass'n, 527 F.2d 216, 223 (7th Cir.
1975); White Motor Corp. v. UAW, 365 F. Supp. 314, 317 (S.D.N Y
1973), aff'd, 491 F.2d 189 (2d Cir. 1974). It argues further
that the Unions' claim to enforce this arbitration award and
CSXT's challenge to that award clearly arise from the same
"transaction or occurrence." Fed.R.Civ.P. 13(a). Indeed, this
appears to be the case under the logical relationship test. See
Computer Assoc. Int'l, Inc. v. Altai, Inc., 893 F.2d 26, 29 (2d
Cir. 1990); Harris v. Steinem, 571 F.2d 119, 123 (2d Cir.
The Unions, however, ask this court to permit the
counterclaims, although compulsory, because "justice requires"
it. Fed.R.Civ.P. 13(f). Rule 13(f) should be read in
conjunction with Fed.R.Civ.P. 15(a), which permits a party to
amend its pleading after 20 days by leave of court, "and leave
shall be freely given when justice so requires." Fed.R.Civ.P.
15(a). See Northwestern Nat'l Ins. Co. of Milwaukee v. Alberts,
717 F. Supp. 148, 153 (S.D.N.Y. 1989). See also Foman v. Davis,
371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962)
(leave should be "freely given" under Rule 15(a)); Richardson
Greenshields Sec. v. Lau, 113 F.R.D. 608, 610 (S.D.N.Y. 1986).
The court in Northwestern Nat'l Ins. Co. listed several
In assessing whether to grant a defendant leave
to amend its answer to add a counterclaim, a court
should consider whether the counterclaim is
compulsory, whether the pleader has acted in good
faith and has not unduly delayed filing the
counterclaim, whether undue prejudice would result
to the plaintiff, or whether the counterclaim
raises meritorious claims.
Northwestern Nat'l Ins. Co., 717 F. Supp. at 153.
The court feels that under these criteria the Unions should
be permitted to assert their counterclaim at this point, both
because they would be unduly prejudiced and because their
counterclaim is at least arguably meritorious. See 6 C. Wright,
A. Miller & M. Kane, FEDERAL PRACTICE AND PROCEDURE §
Accordingly, defendant Unions' motion to amend their answer,
CSXT, Item 30, is hereby granted. As the claims brought by the
Unions in ATDA, CIV-90-481C, are now merged into CSXT,
CIV-88-1404C, the former suit is hereby dismissed.
III. WHAT ORDER SHOULD THIS COURT FRAME OUT OF THE BOARD'S
Defendant Unions now seek an order from this court remanding
the dispute to the Board to award appropriate relief.
ATDA, Item 1. As noted previously, the Board's first award did
not order any relief. Award at 26; Decker II, 879 F.2d at 1002.
This court is fully empowered to grant the Unions' motion under
RLA § 3, First (q), 45 U.S.C. § 153, First (q).
If any employee or group of employees . . . is
aggrieved by . . . the failure of the
[Board] to include certain terms in [its] award,
then such employee or group of employees . . . may
file in any United States district court. . . .
The court shall have jurisdiction to affirm the
order of the [Board] or to set it aside, in whole
or in part, or it may remand the proceeding to the
[Board] for such further action as it may direct.
Id. See also Decker II, 879 F.2d at 1005. Further, several
courts have held that the Board is fully able to award
appropriate relief once "the Board determines that the
employer's conduct was not justified by the contract. . . ."
Consolidated Rail, 491 U.S. at 310 n. 8, 109 S.Ct. at 2483 n.
8. See Order of Ry. Conductors v. Pitney, 326 U.S. 561
, 566, 66
S.Ct. 322, 324-25, 90 L.Ed. 318 (1946); Decker II, 879 F.2d at
1005; Chicago & Northwestern Transp. Co. v. RLEA, 855 F.2d at
1288. The latter court noted, in language quoted in Decker II,
If the NRAB rejects [the carrier's]
interpretation of the collective bargaining
agreements and determines that the employees who
are displaced by the challenged rail line sale are
entitled to relief, it will be able to order the
necessary payment of monies and adjustments in
seniority levels it deems necessary to make these
employees whole. Thus, it cannot be inferred that
the legal remedy available to the RLEA unions in
this case (via the NRAB arbitration procedure) is
Id.; Decker II, 879 F.2d at 1005. See also id. at 997 ("The
NRAB has broad authority in minor disputes to grant relief and
make employees whole if the unions ultimately prevail before
The Unions have won before the Board. "The Board . . .
determined that CSX's position, although `arguable' and
`plausible,' was, on careful analysis, unavailing." Decker II,
879 F.2d at 1003. These findings cannot be challenged by this
court. RLA § 3, First (q), 45 U.S.C. § 153, First (q). As such,
it might seem a simple matter to remand this case to the Board
with an order to make CSXT's former employees whole in line
with the decisions cited above. We must pause, however, because
although the Board determined that CSXT did not have a
contractual defense to the Unions' "asserted statutory right,
if any, to bargain" prior to the line sale, Award at 16
(emphasis added), the Board did not, and could not, determine
whether such statutory rights existed. This court must make
that determination. In light of several cases that have been
decided since Decker II, it appears that those statutory rights
may be limited. See Pittsburgh & Lake Erie R.R. v. Railway
Labor Executives' Ass'n, 491 U.S. 490, 109 S.Ct. 2584, 105
L.Ed.2d 415 (1989) ("P & LE"); Chicago & Northwestern Transp.
Co. v. Railway Labor Executives' Ass'n, 908 F.2d 144 (7th Cir.
1990) ("C & NW — 7th Cir."); Railway Labor Executives' Ass'n
v. Chicago & Northwestern Transp. Co., 890 F.2d 1024 (8th Cir.
1989), cert. denied, ___ U.S. ___, 110 S.Ct. 3237, 111 L.Ed.2d
748 (1990) ("C & NW — 8th Cir."); Southern Pacific Transp. Co.
v. International Bhd. of Locomotive Eng'rs, 752 F. Supp. 400,
408-09 (D.Kan. 1990).
Before launching into an analysis of those cases, however, we
must first understand upon what grounds a Union remedy would be
based. As was discussed in the Background section of this
opinion, either the Unions or the carrier can, by filing a
§ 6 notice, seek "an intended change in agreements [between the
parties] affecting rates of pay, rules, or working conditions.
. . ." RLA § 6, 45 U.S.C. § 156. This section then triggers an
elaborate process of negotiation and mediation between the
parties in an effort to come to agreement on the proposed
change. Burlington Northern R.R., 481 U.S. at 444, 107 S.Ct. at
1850-51; Shore Line, 396 U.S. at 148-49 & n. 14, 90 S.Ct. at
298-99 & n. 14; Jacksonville Terminal Co., 394 U.S. at 378, 89
S.Ct. at 1115. Once this § 6 notice has been given, "rates of
pay, rules, or working conditions shall not be altered by the
carrier until the controversy has been finally acted upon. . .
." RLA § 6, 45 U.S.C. § 156. See P & LE, 491 U.S. at 504, 109
S.Ct. at 2593. As the Court stated in Shore Line, § 6 "imposed
upon the parties an obligation to make every reasonable effort
to negotiate a settlement and to refrain from altering the
status quo by resorting to self-help while the Act's remedies
were being exhausted." Shore Line, 396 U.S. at 149, 90 S.Ct. at
The obligation of both parties during a period in
which any of these status quo provisions is
properly invoked is to preserve and maintain
unchanged those actual, objective working
conditions and practices, broadly conceived, which
were in effect prior to the time the pending
dispute arose and which are involved in or related
to that dispute.
Id. at 152-53, 90 S.Ct. at 301.
The Unions in this case filed § 6 notices to force CSXT to
preserve the status quo until effects bargaining over the line
sale could be completed. Decker II, 688 F. Supp. at 102. This
notice was ineffective in preserving the status quo, but only
because CSXT raised a plausible argument that selling the
Buffalo-Eidenau line, and thereby terminating its positions on
that line, was justified under its contracts with the Unions.
Id. at 109-112, aff'd, 879 F.2d at 998-1002, 1003 n. 9. That
"plausible" argument has now lost. See supra. CSXT's loss of
that argument, however, does not make this a major dispute.
Decker II, 879 F.2d at 1004. Nor does it prevent the line sale,
which has long since been completed. See id. at 995.
Nevertheless, the failure of CSXT's contractual justification
does entitle the Unions to a remedy, based on the idea that the
Unions would have been entitled to preserve the status quo
during bargaining but for that argument. This, the court takes
it, is the basis on which courts would permit the Board to make
union members whole, i.e., put them in the position they would
have been in had they been entitled to maintain the status quo
under § 6. See Consolidated Rail, 491 U.S. at 310 n. 8, 109
S.Ct. at 2483 n. 8; Decker II, 879 F.2d at 1005; Chicago &
Northwestern Transp. Co. v. RLEA, 855 F.2d at 1288. See also
Comment, Enjoining Strikes and Maintaining the Status Quo in
Railway Labor Disputes, 60 Colum.L.Rev. 381, 393-94 (1960)
(discussing possible remedies should the unions prevail in
arbitration). This remedy may not actually make union members
whole, given the delay and the irreversible sale of the
Buffalo-Eidenau line, but it appears to be all that the Unions
may be entitled to. See Consolidated Rail, 491 U.S. at 310 n.
8, 109 S.Ct. at 2483 n. 8; Brotherhood of Locomotive Eng'rs v.
Missouri-Kansas-Texas R.R., 363 U.S. 528, 534, 80 S.Ct. 1326,
1330, 4 L.Ed.2d 1379 (1960); Comment, supra, 60 Colum.L.Rev. at
What has been called into question by the cases decided since
Decker II, however, is whether preservation by CSXT of the jobs
on the Buffalo-Eidenau line would have been part of the status
quo which must have been maintained had the Unions' § 6 notices
been effective. In P & LE, the Supreme Court held that
the decision of a railroad employer to go out of
business and consequently to reduce to zero the
number of available jobs is not a change in the
conditions of employment forbidden by the status
quo provision of § 156.
P & LE, 491 U.S. at 509, 109 S.Ct. at 2596. The Court reasoned
[T]he decision to close down a business entirely
is so much a management prerogative that only an
unmistakable expression of congressional intent
will suffice to require the employer to postpone a
sale of its assets pending the fulfillment of any
duty it may have to bargain over the subject
matter of union notices such as were served in
Id. Thus, in a case where a carrier decided to leave the
railroad business entirely, the preservation of jobs during
effects bargaining was held not to be part of the status quo
requirement of § 6.
This holding was based, by analogy, on Textile Workers Union
v. Darlington Mfg. Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d
827 (1965), a National Labor Relations Act
("NLRA") case, which held that going out of business entirely,
even if motivated by anti-union animus, was not an unfair labor
practice under the NLRA. See P & LE, 491 U.S. at 507-09, 109
S.Ct. at 2594-96. In Darlington, the Court reasoned that the
proposition that a single businessman cannot
choose to go out of business if he wants to would
represent such a startling innovation that it
should not be entertained without the clearest
manifestation of legislative intent or unequivocal
judicial precedent so construing the Labor
Darlington, 380 U.S. at 270, 85 S.Ct. at 999; P & LE, 491 U.S.
at 507-08, 109 S.Ct. at 2594-95. This reasoning, however, was
expressly confined by the Court to a situation where an
employer was quitting the business completely. The Court
"disagree[d] with the Court of Appeals that such right includes
the ability to close part of a business no matter what the
reason." Darlington, 380 U.S. at 268, 85 S.Ct. at 998 (emphasis
added). Partial closings might be motivated by a desire to
obtain future benefits from employees, the Court held, id. at
271-75, 85 S.Ct. at 1000-02, "[b]ut a complete liquidation of a
business yields no such future benefit for the employer, if the
termination is bona fide." Id. at 272, 85 S.Ct. at 1000.*fn10
This distinction was reaffirmed in P & LE. P & LE, 491 U.S.
at 507 n. 16, 109 S.Ct. at 2595 n. 16 (noting that "a partial
liquidation might present a different case").
Since P & LE was handed down, both the Seventh and Eighth
Circuits have extended the Court's holding from situations
where a railroad employer has chosen to get out of the railroad
business entirely to those instances where the railroad has
merely decided to sell an unprofitable line. C & NW — 7th
Cir., 908 F.2d at 152; C & NW — 8th Cir., 890 F.2d at 1025. In
the Seventh Circuit decision, Judge Posner argued that sale of
a line was also a management prerogative,
akin to a manufacturer's decision to curtail its
output or to retire unneeded capacity without
replacing it. It is not a decision about labor
inputs. It has of course consequences for the
workers — any major business decision does. But if
this were enough to make it a change in pay, work
rules, or working conditions, then every
significant business decision that a carrier made
would be a mandatory subject of collective
bargaining; there would be no management
prerogatives; and Pittsburgh & Lake Erie, which
holds that the carrier is not required to bargain
over the sale of its business, would be incoherent.
C & NW — 7th Cir., 908 F.2d at 152. See also Southern Pacific,
752 F. Supp. at 408-09 (citing Judge Posner's opinion with
approval). The Eighth Circuit extended P & LE's holding by
noting that "after the sale C & NW would have no relationship
with the purchaser." C & NW — 8th Cir., 890 F.2d at 1025. See
also Railway Labor Executives Ass'n v. CSX Transp., Inc., No.
89-2639, Transcript at 64-66 (D.D.C. May 9, 1990 bench ruling)
("mere ownership and operation of rail lines is not a working
condition preserved by the Railway Labor Act status quo").
These cases thus appear to hold that unions filing § 6 notices
cannot, once a line sale is proposed, preserve their railroad
jobs as part of the status quo while negotiations over proposed
protections in the collective bargaining agreements are being
If this is the holding of the Seventh and Eighth Circuits, it
directly contradicts the Second Circuit's mandate in Decker
II.*fn11 In this case, upon hearing of CSXT's intent
to sell the Buffalo-Eidenau line, the Unions filed § 6 notices
to prevent the sale, and the attendant elimination of jobs,
until bargaining over the effects of the sale on the Union
could be completed. After an initial round of suits, see supra,
CSXT filed suit in this court seeking a declaratory judgment
that it had no obligation to bargain with the Unions prior to
the line sale. The Unions counterclaimed, asking that the
status quo be maintained until effects bargaining could be
completed. The carrier defended this counterclaim on the ground
that the dispute over the line sale was minor, i.e., it was
covered by existing contracts. This court found this
contractual defense not obviously insubstantial, and therefore
permitted the line sale to go forward while the parties
arbitrated their dispute. Decker II, 688 F. Supp. at 112, aff'd,
879 F.2d at 1002.
Under the logic of C & NW — 7th Cir. and C & NW — 8th Cir.,
however, CSXT would never have had reason to offer a
contractual defense to the Union's claim. If "management
prerogative" entitled CSXT to sell its rail lines and abolish
the jobs on those lines, it would not have needed to argue that
it had such rights under its contracts. Filing a § 6 notice
would not, and could not, have forced CSXT to retain the
Unions' positions on the Buffalo-Eidenau line, even in the
absence of such a defense. See C & NW — 8th Cir., 890 F.2d at
1026. That is not what the Second Circuit held. In Decker II,
the court explained:
As stated earlier, the Board determined that
there was "no written language support" in the
Agreements, and no support in past practice, for
CSX's position that it could sell the
Buffalo-Eidenau line without bargaining over the
effect of the sale on employees. Had the district
court reached this conclusion at the outset, it
would presumably have treated the controversy as a
major dispute, and CSX would have been required to
maintain the status quo as to the affected
employees, whether or not any transfer of the
Buffalo-Eidenau line occurred, pending resolution
of that major dispute by the prescribed RLA
Decker II, 879 F.2d at 1003 n. 9 (emphasis added). In the
absence of a plausible contractual justification for its
actions, the carrier must maintain the status quo under § 6.
See Consolidated Rail, 491 U.S. at 307, 109 S.Ct. at 2482-83;
General Comm. of Adjustment v. CSX R.R., 893 F.2d at 591;
Chicago & Northwestern Transp. Co. v. RLEA, 855 F.2d at
1284-86; Maine Cent. R.R., 787 F.2d at 782.
The principle that unions may preserve their positions under
the status quo provision of § 6 is not new. See Order of R.R.
Telegraphers v. Chicago & Northwestern Ry., 362 U.S. 330, 80
S.Ct. 761, 4 L.Ed.2d 774 (1960). In Telegraphers, a carrier
sought to eliminate a series of train stations — and the jobs
at those stations — which, because of reduced traffic, it
considered unnecessary for the efficient operation of its
trains. The telegraphers union responded by filing § 6 notices,
stating that it wanted to amend the collective bargaining
agreement to add the following rule: "No position in existence
on December 3, 1957, will be abolished or discontinued except
by agreement between the carrier and the organization." Id. at
332, 80 S.Ct. at 763. The Court held that this proposal — to
lock in the number of union positions in existence on a certain
date — was a proper subject for collective bargaining.
[I]n the collective bargaining world today, there
is nothing strange about agreements that affect
the permanency of employment. The District Court's
finding that "[c]ollective bargaining as to the
length or term of employment is commonplace," is
We cannot agree with the Court of Appeals that
the union's effort to negotiate about the job
security of its members "represents an attempt to
usurp legitimate managerial prerogative in the
exercise of business judgment with respect to the
most economical and efficient conduct of its
Id. at 336, 80 S.Ct. at 765 (quoting lower court
As a bargainable topic, the union's proposed
contract change related to "rates of pay, rules, or working
conditions," and was thus subject to the status quo provision
of § 6. Id. at 334, 339-40, 80 S.Ct. at 763, 766-67; RLA § 6,
45 U.S.C. § 156.*fn13
Telegraphers was distinguished in P & LE, but in a way that
reaffirmed its significance for a case like the present one
where a carrier eliminated only some of its railroad positions,
not all of them.
In Telegraphers a railroad was seeking simply to
eliminate or consolidate some of its little-used
local stations. The railroad here, by contrast,
sought to sell all its lines and go out of
business. There is nothing in Telegraphers that
forces us to reach the result, in this extreme
case, that P & LE was prohibited from terminating
its operations without first bargaining with the
unions. Notwithstanding the policy considerations
prompting the enlarged scope of mandatory
bargaining under the RLA, in light of Darlington,
which First National Maintenance [Corp. v. NLRB,
452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318
(1981)] reaffirmed, we are not inclined to extend
Telegraphers to a case in which the railroad
decides to retire from the railroad business.
P & LE, 491 U.S. at 508 n. 17, 109 S.Ct. at 2595 n. 17
(emphasis added). Thus, unions may still collectively bargain
for job protection during a line sale and union members'
positions are entitled to status quo protection during that
The court concludes that P & LE has not altered the Unions'
statutory rights under § 6 as they might have applied to this
case. Had CSXT not offered a plausible contractual defense to
the Unions' § 6 request to bargain over new labor-protective
provisions in its collective bargaining agreements, the Unions
would have been entitled to preserve their positions as part of
the status quo requirement of § 6 until the bargaining over new
provisions was complete. Decker II, 879 F.2d at 1003 n. 9. The
failure of this contractual defense before the Board entitles
the Board to award a remedy to the affected union members in
this case. See Consolidated Rail, 491 U.S. at 310 n. 8, 109
S.Ct. at 2483 n. 8; Decker II, 879 F.2d at 1005; Chicago &
Northwestern Transp. Co. v. RLEA, 855 F.2d at 1288. This
opinion should not be
construed, however, to decide what remedy, if any, might be
appropriate for these members. This decision is left in the
hands of the Board. See General Comm. of Adjustment v. CSX
R.R., 893 F.2d at 592.*fn15
The court hereby remands this case to the Board to consider
whether to award a remedy to the union members affected by the
sale of the Buffalo-Eidenau line in accordance with its earlier
decision and this opinion.
The Board did not exceed its jurisdiction in rendering its
decision of December 15, 1988.
The Unions' motion to amend their answer in CSXT,
CIV-88-1404C, is granted. Accordingly, as the claims brought by
the Unions in ATDA, CIV-90-481C, have been merged into CSXT,
CIV-88-1404C, the ATDA suit is hereby dismissed.
The court remands this case to the Board to consider whether
to award a remedy to the union members affected by the sale of
the Buffalo-Eidenau line in accordance with its decision of
December 15, 1988, and this opinion.