Norfolk and Western Ry. Co. v. Brotherhood of R.R. Signalmen

Page 847

164 F.3d 847

160 L.R.R.M. (BNA) 2141, 137 Lab.Cas. P 10,324

NORFOLK AND WESTERN RAILWAY COMPANY; Norfolk Southern Railway Company; CSX Transportation Incorporated; Consolidated Rail Corporation, Plaintiffs-Appellees and Norfolk Southern Corporation, Counterdefendant-Appellee, v. BROTHERHOOD OF RAILROAD SIGNALMEN, Defendant-Appellant and Brotherhood of Locomotive Engineers; American Train Dispatchers Department-BLE; Brotherhood of Maintenance of Way Employees; The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO; International Brotherhood of Electrical Workers; National Conference of Firemen & Oilers; Sheet Metal Workers International Association, Defendants.

No. 98-1808.

United States Court of Appeals Fourth Circuit.

Argued Sept. 23, 1998.

Decided Dec. 29, 1998.

ARGUED: John O'Brien Clarke, Jr., Highsaw, Mahoney & Clarke, P.C., Washington, D.C., for Appellant. Jeffrey Stephen Berlin, Sidley & Austin, Washington, D.C., for Appellees. ON BRIEF: Michael S. Wolly, Daniel G. Orfield, Zwerdling, Paul, Leibig, Kahn, Thompson & Wolly, P.C., Washington, D.C., for Appellant. Mark E. Martin, Sidley & Austin, Washington, D.C.; William B. Poff, Woods, Rogers & Hazlegrove, Roanoke, Virginia; Ronald M. Johnson, Akin, Gump, Strauss, Hauer & Feld, L.L.P., Washington, D.C.; Arthur P. Strickland, Roanoke, Virginia, for Appellees.

Before WILKINS, NIEMEYER, and MICHAEL, Circuit Judges.

OPINION

NIEMEYER, Circuit Judge:

In the wake of an announcement in April 1997 by Norfolk Southern Corporation and CSX Corporation that they were acquiring and dividing a major portion of the assets of Conrail, Inc., the Brotherhood of Railway Signalmen, a union representing employees of the corporations' railroad subsidiaries, gave notice under § 6 of the Railway Labor Act that it wished to renegotiate the terms of its collective bargaining agreements in light of the impact that the acquisition would have on the jobs of employees represented by the union. The district court ruled that the union's § 6 notice was invalid and that the union was required to present its position to the Surface Transportation Board which had exclusive jurisdiction under the Interstate Commerce Act to approve the terms and conditions of the acquisition. On the union's appeal, we reverse the district court's dismissal of Norfolk Southern Corporation, affirm its declaratory judgment, and vacate its anti-strike injunction against the union.

I

In October 1996, Norfolk Southern Corporation and CSX Corporation, both railroad holding companies, announced competing offers to purchase the stock of Conrail, Inc. Several months later, however, they jointly announced an agreement under which subsidiaries of the two corporations would each acquire a portion of Conrail's assets.

In June 1997, these railroad holding companies and their subsidiary railroad corporations filed an application with the Surface Transportation Board ("STB"), the successor to the Interstate Commerce Commission, for approval of the acquisition under the Interstate Commerce Act, 49 U.S.C. § 11324(a). Under the proposed transaction, Conrail's assets were to be divided, with a portion of the lines operated by Norfolk Southern Railway Company, a portion operated by CSX Transportation, Inc., and a portion operated by Conrail for the joint benefit of the acquiring companies. In order to integrate the new lines, the acquiring railroads proposed to modify existing labor agreements to reflect the new operating arrangements. They stated that under the transaction "train crews will be required to operate interchangeably over either CSX or [Norfolk Southern] and allocated Conrail routes in many corridors," which would not be allowed under the existing collective bargaining agreements. Additionally, the railroads claimed that "the efficiencies of the transaction could not be achieved ... if the expanded CSX and [Norfolk Southern] Systems were required to operate pursuant to existing labor agreements under which different maintenance crews must be used to maintain tracks of existing Conrail and CSX or [Norfolk Southern] in the same geographic area." Moreover, in their application to the STB, the railroads acknowledged that the proposed transaction would net a loss of over 2,600 jobs and a transfer of over 2,300 jobs. To resolve any labor disputes arising from the impact of the proposed transaction, the railroads proposed operating under New York Dock procedures--originally adopted by the Interstate Commerce Commission for such transactions in New York Dock Ry.--Control--Brooklyn Eastern Dist. Terminal, 366 I.C.C. 60, aff'd sub nom., New York Dock Ry. v. United States, 609 F.2d 83 (2d Cir.1979)--which would automatically provide established protections to employees and would resolve any labor disputes through binding arbitration under an established time schedule.

Several unions, including the Brotherhood of Railway Signalmen (the "Union"), resisted the railroads' proposal to resolve labor disputes under the New York Dock procedures, contending that all such disputes had to be resolved under the procedures imposed by the Railway Labor Act (the "RLA"), procedures which both sides agree would take longer than the New York Dock procedures and which could lead to a bargaining impasse and ultimately a strike. In their statement of opposition filed with the STB on October 21, 1997, these unions maintained that "implementation of such changes outside RLA processes would violate both the RLA and the [Interstate Commerce Act]. Indeed unions would respond to such change by striking and by submitting claims for compensation under the Tucker Act, 28 U.S.C. § 1346." They advised the STB that several of the unions intended "to utilize the Railway Labor Act's collective bargaining processes to deal with the impact of the proposed transactions on employees they represent" and that unilateral efforts to change their collective bargaining agreements would justify the unions' "resort to self-help."

The day after filing its statement with the STB, the Union delivered a notice under § 6 of the RLA (which authorizes either party to a collective bargaining agreement to serve notice of proposed changes to the agreement and which requires the parties to bargain over the proposed changes), seeking changes of work conditions through RLA procedures. The railroads, however, rejected the § 6 notice, claiming (1) that the notice was barred by a moratorium clause in the collective bargaining agreement with the Union, which prohibited service of a § 6 notice before November 1, 1999, and (2) that the proposals in the § 6 notice were, in any event, under the sole jurisdiction of the STB because they arose from the transaction pending approval. Notwithstanding its formal position, the railroads agreed to meet with the Union in an effort to resolve their differences, but these meetings failed to produce an agreement.

In light of this impasse, both the railroads and the Union filed separate actions in federal court on October 31, 1997, for declaratory judgment and injunctive relief. The railroads filed their action in the Western District of Virginia, and the Union, along with other objecting unions, filed its action several hours later in the Western District of Pennsylvania. The cases were consolidated in the Western District of Virginia, and the Union's claims were taken as a counterclaim to the railroads' claims. While numerous other unions were originally parties to this consolidated action, all of the other unions have reached agreement with the railroads and have been dismissed from this action.

On various motions of the parties to dismiss and for summary judgment, the district court entered judgment in May 1998 (1) dismissing Norfolk Southern Corporation because it was not a railroad and was not a party to any collective bargaining agreement with the Union; (2) ruling that the Interstate Commerce Act granted the STB sole jurisdiction over labor issues related to the proposed transaction; (3) ruling that the Union's § 6 notice was invalid both because it violated the moratorium clause of the collective bargaining agreements and because the subject matter of the notice was exclusively before the STB; and (4) enjoining the Union for one year "from striking or otherwise exerting coercive self-help in an attempt to block implementation of the Conrail transaction or in an attempt to force plaintiff railroads or affiliated carriers to bargain with them regarding the terms of the Conrail transaction except as specifically authorized by the STB or the [Interstate Commerce Act]." Norfolk and Western Ry. Co. v. Brotherhood of R.R. Signalmen, 11 F.Supp.2d 833, 849 (W.D.Va.1998).

Two months after entry of judgment in the district court, on July 20, 1998, the STB approved the transaction and imposed the New York Dock procedures for resolving the labor disputes between the parties. In response to the Union's request that the STB not approve all of the collective bargaining agreement modifications proposed by the railroads in their application and that the STB make particular findings as to those changes which were "necessary" to carry out the transaction, the STB ruled:

In approving a rail merger or consolidation such as this, we have never made specific findings in the first instance regarding any [collective bargaining agreement] changes that might be necessary to carry out a transaction, and we will not do so here. Those details are best left to the process of negotiation and, if necessary, arbitration under the New York Dock procedures. For us to make determinations on those issues now would be premature.... We will resolve them only as a last resort, giving deference to the arbitrator.

CSX Corp. et al.--Control and Operating Leases/Agreements--Conrail, Inc. & Consolidated Rail Corp., Dec. No. 89 at 126 (July 20,1998).

This appeal followed entry of the judgment in the...