Cases by Issue - Working Conditions

Brotherhood Of Locomotive Engineers v. Atchison, Topeka & Santa Fe Railroad Co. - Oral Argument

Fri, 09 Jan 2009 14:49:48 +0000

Case:

Brotherhood Of Locomotive Engineers v. Atchison, Topeka & Santa Fe Railroad Co.

Media File:

94-1592_19951030-argument.mp3

Related Transcript:

1995_94_1592_argument.xml

Transcript:

Argument of Lawrence M. Mann

Chief Justice Rehnquist: We'll hear argument next in Number 94-1592, Brother... spectators are admonished to be quiet until you get outside the courtroom.

The Court is still in session.

We're going to hear argument next in Number 94-1592, Brotherhood of Locomotive Engineers v. The Atchison, Topeka, and the Santa Fe.

Mr. Mann, you may proceed whenever you're ready.

Mr. Mann: Mr. Chief Justice, and may it please the Court:

The obvious question for you to ask me this morning is, if Congress intended for waiting time for deadhead transportation to be time on duty, why didn't it say so specifically?

Well, the answer to that, at least in my mind, is very simple.

We're dealing with a statute that first of all encompasses many train operations.

Even the petitioners acknowledge that there are thousands of train operations daily.

At the time of the '69 statute, there were 36,000 train operations each day, so--

Unknown Speaker: What do you mean when you say train operations?

Mr. Mann: --Meaning, a crew goes on duty and performs service for the railroad.

That would be one train operation, Your Honor.

And the other answer to that is, and I think it's the real guts of the case is, there was no need to specifically state that waiting time was time on duty because Congress treated that issue in several sections of the statute, and I refer the Court to section 21103(b), and I will talk about (1), (2), (3), (4), (5), and (6) subsections.

And in each one of those subsections it's very clear that Congress was attempting... and I submit to you they did close the loopholes, and one basic problem is that railroad workers at that period of time were sitting on trains for hours on end waiting for a pickup crew or another train to come along and take them to their final release period, and it's... throughout the entire amendments the sole purpose was to close those loopholes, and they did it in several ways.

First of all, you don't have to be working at all to be covered as time on duty under the act, because it's very clear... you know, I'm just a country boy, Your Honors, but English is English.

It says, interim periods available for rest at a place--

Unknown Speaker: Where are you reading from, Mr. Mann?

Mr. Mann: --Excuse me, Your Honor.

Unknown Speaker: And where will we find it?

Mr. Mann: This is section 21103--

Unknown Speaker: Page 2 of the petition?

Mr. Mann: --In my brief, Your Honor, it is... yes, page 2 of the petition.

Page 3, number (5), subsection (5), Your Honor, an interim period available for rest.

Now, what the carriers and the Government is telling you is that this period of time should not be considered here.

They want to write out and put conditions on each section, not giving it its broad and plain meaning.

They--

Unknown Speaker: Well, are you reading out the word, interim?

Mr. Mann: --The interim, Justice Souter, means interim between the time you go on duty and the time that you're finally released from duty.

Unknown Speaker: It doesn't mean interim as between two periods of active duty?

Mr. Mann: It does not, Your Honor.

Unknown Speaker: Do we have a definition in the statute?

Mr. Mann: Well, we have some legislative history.

In the hearings, as well as in the Senate report, it talks about final release of all... finally released from all responsibilities.

The proof of the pudding there is--

Unknown Speaker: I'm sorry, I'm just not getting it.

I'm sure somewhere they use that phrase, but how are you connecting that with the meaning of the word?

Mr. Mann: --Well, interim--

Unknown Speaker: Interim.

Mr. Mann: --Interim means, as discussed in the House hearings and the industry spokesman, the Association of American Railroads, made that point clear, Your Honor, if I--

Unknown Speaker: Well, he may have done it, but is there a House or a Senate report that defines the term, or indicates--

Mr. Mann: --It does not define the term.

Congress--

Unknown Speaker: --If I understand your argument correctly, your meaning would have been conveyed better if the word interim were left out, just a period available for rest.

Mr. Mann: --Well--

Unknown Speaker: What does interim add that helps rather than hurts your position?

Mr. Mann: --It... I submit it doesn't hurt my position.

It includes periods for operations.

Unknown Speaker: But you would be stronger, your argument would be stronger, would it not, if the statute didn't say, interim?

Mr. Mann: Somewhat, but I don't think it's definitive, because as the railroad... the chief railroad witness, and I think it's very critical, testified, and I refer to the House hearings at page 135, where Mr. Manion... Mr. Manion was the vice president of the Association of American Railroads, and he was talking about the problems of deadheading transportation and what would happen if the bill as was introduced were adopted, and after he discussed that part, he said, however, under another provision of H.R. 8449, which is the section dealing with interim periods for rest, section 1(b)(3)... now, that is exactly the same as what was passed, subsection (5), and I quote:

Periods available for rest at other than a designated terminal will be included as time on duty.

Consequently, if a crew reaches the hours-of-service limit in the country and is relieved there, it will still be on duty for purposes of hours-of-service purposes because it is not relieved at a designated terminal.

Unknown Speaker: Who says this?

Well, Mr. Mann, even for people devoted to legislative history, that's a fairly low level, isn't it, what a witness testified?

Mr. Mann: Except, Your Honors, this was an industry spokesman, the Association of American Railroads, on a bill that only affected them, and what Congress was attempting to do is to close all these loopholes, and I submit to you, this statement as far as I am concerned--

Unknown Speaker: Well, how do we know that Congress intended to "close all these loopholes"?

Mr. Mann: --Well, the act solely--

Unknown Speaker: It's not called the loopholes-closing act.

[Laughter]

Mr. Mann: --No, Your Honor.

The act solely deals with placing in the act periods of time that not... that previously were not time on duty as being time on duty, with one exception, deadhead transportation to the final release point.

Everything else that they did, the Congress made it time on duty to eliminate every abuse that was testified to in these hearings, and this is the industry spokesman.

Now, you can look at the hearings, and I spent some time doing that, to see what all the rest of the witnesses stated from the industry.

Unknown Speaker: But is there something in there that talks about the definition of deadhead transportation?

Mr. Mann: Yes, there is.

Unknown Speaker: Deadhead transportation, I would think sometimes when people are transported they include the time that they're sitting around in the station waiting room--

Mr. Mann: Well, that's--

Unknown Speaker: --or the airport--

Mr. Mann: --That's one of the issues.

Unknown Speaker: --and sometimes they don't, so it all seems quite ambiguous to me, anyway, and if it's ambiguous, shouldn't you leave this kind of interpretation to the agency?

Mr. Mann: Well, two things, Justice Breyer.

One is, of course, the industry, how they dealt with deadhead transportation, and here's how they define it... Mr. Manion again.

Deadheading may be defined as travel performed by railroad employees at the direction of a railroad.

Now, he was not the only railroad witness.

Unknown Speaker: But that doesn't do it, does it?

Mr. Mann: Well--

Unknown Speaker: I say I'm traveling to Boston.

I might or might not include in my travel time the time spent at the airport.

Mr. Mann: --That's correct.

Unknown Speaker: All right.

So is there something there that says, by the way, we don't mean time spent at the station, or spent at the airport, or sitting around waiting for the train to show up?

Is there anything like that?

I--

Mr. Mann: There are three things.

One is commingled service, which is defined in the statute as any other service for the carrier.

You are part of the crew.

You're not free to leave the premises except being under the control and subject to being called, and you're not finally released from duty until you get back at the terminal and do other ministerial duties.

Unknown Speaker: --Mr. Mann, is it your position that if you are deadheaded back to your final point of release, while you're waiting to get the first train, let's say to Omaha, that is on-duty time?

What about... suppose you have to wait again in Omaha to get another train to New York City, where you're going to be released?

What about that wait?

Is that part of deadhead--

Mr. Mann: All time... all time--

Unknown Speaker: --So you're not on duty while you go from Omaha to... where did... from wherever you're... wherever you end your work to Omaha, you're not on duty--

Mr. Mann: --You are on duty.

Unknown Speaker: --While you're being transported?

Mr. Mann: You're on duty.

That's specifically in the statute.

From the time you mark on duty, and that's subsection (4) of the--

Unknown Speaker: I thought deadheaded transportation back is not counted.

Mr. Mann: --Deadheaded transportation back, at the end of your tour of duty, at the end of your tour--

Unknown Speaker: Okay--

Mr. Mann: --of operations--

Unknown Speaker: --My tour has ended in San Francisco.

Mr. Mann: --Okay.

Unknown Speaker: And I... they've arranged to get me back by putting me on a train to Omaha, all right.

Now, you say while I'm waiting in San Francisco, I'm still on duty, all right.

What about while I'm waiting in Omaha?

Mr. Mann: It's all commingled service, and it's also time that is free for rest, and under the statute, that's on-duty time.

Unknown Speaker: And what about the transportation while I'm on the train between San Francisco and Omaha?

Mr. Mann: That is not, because of the statutory provision.

That's why Congress carved out this one exception.

The only exception is that it will not be counted as time on duty, nor time off duty.

That one period of actual movement, traveling in... traveling in is the key.

Unknown Speaker: Why is that magic?

I don't understand that.

Mr. Mann: Well, because--

Unknown Speaker: I mean, if... it makes no sense at all.

Mr. Mann: --Well, maybe... maybe free at rest makes no sense at all, either, but it would create an anomaly.

The anomaly would be this--

Unknown Speaker: You don't think it's an anomaly that I'm on duty while I'm at rest and back on duty whenever I start moving again?

Mr. Mann: --Congress said so.

Unknown Speaker: And if I have eight stops along the way, I'm on-off, on-off.

Mr. Mann: If Congress had not said that rest time was time on duty, I would agree with you, but Congress didn't say that.

Unknown Speaker: Mr. Mann, what happens if I'm being transported back in a van and there's a breakdown, and it takes 3 hours to get that van fixed so it can move again to the place where I'll be released?

We know that the time that you're in the van is deadhead time, and it's not on-duty time.

What about when the car breaks down and I'm waiting to have it fixed?

Mr. Mann: It's a good question, but I would submit to you that the way Congress envisioned this, I would argue to you that any time that you're not traveling, and it's very clear if you look at the statute and the meaning of the terms, if you're not traveling in the deadhead transportation, then it's either commingled service, you're performing other service--

Unknown Speaker: No service.

I'm waiting--

Mr. Mann: --When you're waiting--

Unknown Speaker: --for the van to be fixed.

Mr. Mann: --that's rest time.

Unknown Speaker: Well, why isn't it on duty time, as it is in Justice Scalia's Omaha wait.

Why is he on duty in Omaha but not on duty sitting on the side of the road?

Mr. Mann: Congress said that an interim period available for rest is time on duty.

You can be at rest completely--

Unknown Speaker: He's at rest on the side of the road.

Mr. Mann: --Mm-hmm.

Unknown Speaker: So he's on duty, so the answer to Justice Ginsburg's question is, he's on duty.

Mr. Mann: He doesn't have to be performing any duty.

He can simply be doing nothing, just sitting there waiting, doing absolutely nothing--

Unknown Speaker: But it's treated as on-duty time.

Mr. Mann: --Specifically.

Unknown Speaker: Yes.

Yes.

I assume you don't take the position that when the van stops for a red light he's back on duty, do you?

[Laughter]

Is it a... it's not an in-motion theory, not completely that, huh?

Mr. Mann: Typically, the problem... we wouldn't be here if there hasn't been tremendous abuses.

What we have as a typical situation, at the end of the 12 hours a crew is waiting and waiting and waiting.

We have evidence in the record that up to 10 hours, sometimes, they have to wait for someone to come and get them--

Unknown Speaker: Can I go back... I'm... I--

Mr. Mann: --Yes, Your Honor.

Unknown Speaker: --My question... and you just didn't have a chance to get out the other two things--

Mr. Mann: Oh--

Unknown Speaker: --and what I was curious, remember, that this word deadhead transportation struck me, at least in the statute, as ambiguous, that of course deadhead transportation is limbo time, yes--

Mr. Mann: --Yes.

Unknown Speaker: --but what is deadhead transportation, and my question was, what evidence is there that you could not... not that you... but you could not read those words, deadhead transportation, to include time in the station, time waiting to go on the train itself, as we do with airplanes and trains normally.

Mr. Mann: If you're--

Unknown Speaker: And what is it in... and you listed three things.

The first thing was, you said I should look at the commingled, the definition of commingled--

Mr. Mann: --Commingling--

Unknown Speaker: --and you were going to mention two others.

Mr. Mann: --That's correct.

One is the rest period, interim period for rest--

Unknown Speaker: Where would I... where do I find--

Mr. Mann: --That is--

Unknown Speaker: --You mean just in the statute here, or in--

Mr. Mann: --In the statute.

Unknown Speaker: --All right.

I've looked at that.

It didn't seem--

Mr. Mann: Oh... oh, I--

Unknown Speaker: --to me that it was clear.

Mr. Mann: --Well, let me--

Unknown Speaker: One is the definition of commingled in the statute, the other is the definition of rest period, and what was the third?

Mr. Mann: --The third is, what was Congress trying to do here?

Unknown Speaker: Okay, what?

Mr. Mann: Congress was trying to eliminate the abuses, and this was one of the greatest abuses that the industry was accomplishing.

They were leaving these crews out there an inordinate amount of time, and they're still doing it today.

Unknown Speaker: Well, if, in fact, it is an abuse, and if, in fact, the agency has significant delegated power to define deadhead transportation either way or partial ways, then couldn't you deal with that problem through the agency dealing with it?

Mr. Mann: I don't think the agency, Justice Breyer, has the authority here.

This is the one statute, the only safety statute on the books, in which the Federal Railroad Administration does not have regulatory authority.

They enforce, but they have no regulatory authority.

In fact, Congress took away the authority.

In the old statute in 1908, the old statute, the Interstate Commerce Commission did have that jurisdiction.

Unknown Speaker: But they can interpret.

Mr. Mann: They can interpret, yes.

Unknown Speaker: They can interpret, and they did.

Mr. Mann: They did.

Unknown Speaker: And they said, we think that two things go together.

When you're going to the job, then the waiting time, everything, is on-duty time.

Mr. Mann: Yes.

Unknown Speaker: And when you're going from the job, then everything is this limbo thing.

Why doesn't that just make entire sense as an interpretation?

Mr. Mann: It does in one respect, but the other respect I can just say, the very opposite is true.

Going to deadhead trans... deadhead to-duty assignment obviously includes the time you report to duty, and the time you are actually traveling, because the first subsection states very clearly that time on duty begins when you report for duty, so obviously, and I could argue that if that is time on duty from the point of reporting to duty and actually moving in transit, then the opposite situation coming back is the same.

Unknown Speaker: But one thing is not the same.

You can't get very far with your release point, because the statute tells us that the deadhead transportation time back, before the point at which you're released, that that time is limbo time.

Mr. Mann: That's correct, but the statute also tells you that, unlike what the respondents are saying, it tells you that you are not... there's... the position of the respondents, simply put, is that the employee is off-duty, no further obligations, after the 12 hours is reached.

That's just not the fact.

Unknown Speaker: Well, that's a factual question.

We didn't take this case to figure out the fact of whether there are duties, and I at least am going to decide it on the assumption that there aren't.

Now, if you can prove that there are duties in a particular case, it's a different case.

But let's assume there are no duties, that the railroad worker is simply waiting to go back to where his rest time begins.

Now, I can see why Congress would want deadhead time, including the time waiting for the deadhead transportation to arrive, I can understand why they would want that to count at the beginning of the work period, because by the end of the work period, the worker's going to be very tired.

You should count that time against him, right?

But at the end of the work period, what difference does it make?

Mr. Mann: Well--

Unknown Speaker: He's not doing any more work for the railroad, his rest time for the mandatory period of rest he has to take doesn't begin... this is limbo time, right, it's not rest time.

Mr. Mann: --Correct.

Unknown Speaker: So what... why would Congress want it to count towards work time?

Mr. Mann: There are several--

Unknown Speaker: I can't understand it.

Mr. Mann: --answers to that.

Number 1, why would they want just rest time to be time on duty?

Because there were abuses at that time, and there are still abuses.

That's one reason.

Unknown Speaker: Yes, but that's going back to your claim that in fact they're really being required to do something.

It seems to me that that answer is inconsistent with the--

Mr. Mann: They're not required... Justice Souter, they're not required to do anything, and they're off... I mean, and they're on duty, specifically by the statute, and that was what the industry spokesmen were telling Congress at the time.

Congress, if you adopt this, we can never let anyone off at an interim point.

Unknown Speaker: --Yes, but--

--When they have more duties later.

That was addressing--

Mr. Mann: They do.

They still do.

Unknown Speaker: --the situation when they have more duties later, so that their total on the job, their total time on the job will be stretched, and by the end of the job, they'll be very tired.

Mr. Mann: Justice Scalia--

Unknown Speaker: Here we're talking, by definition, about a situation where their job is done, and it's not going to be counted toward their rest time, and it's not going to make them more tired for any duties that they perform.

Mr. Mann: --I respectfully differ with you because, as I've pointed out in my reply brief, the duties don't end.

When you get at the end--

Unknown Speaker: You're going to win in front of the Seventh Circuit.

Mr. Mann: --Sir.

Unknown Speaker: If that's true, then under the Seventh Circuit's opinion, you're going to win, ultimately.

Mr. Mann: The Seventh Circuit did not consider anything but that one section of subsection (4), time spent in deadhead transportation.

Unknown Speaker: Yes.

Mr. Mann: They did not look--

Unknown Speaker: If you can go back to the Seventh Circuit, or the district court under the Seventh Circuit opinion and say, aha, they have responsibilities, then you're going to win.

Mr. Mann: --Well, I can only suggest--

Unknown Speaker: I mean, the whole point of our taking this case is not to decide whether you win or not--

Mr. Mann: --Correct.

Unknown Speaker: --on that hypothesis.

Mr. Mann: Correct, but I think it is significant in that it counters the argument of the respondents that all duties end at that 12-hours time, and it doesn't.

I--

Unknown Speaker: But your case... in answer to my question, you were candid, and I appreciated it.

You said if the van breaks down so that they're not moving, that's limbo time, and it's clear that in that situation they have no trains to watch--

Mr. Mann: --Correct.

Unknown Speaker: --no safety hazards to report, they have nothing to do--

Mr. Mann: Correct.

Unknown Speaker: --except wait.

Mr. Mann: And they are not free to go.

They are part of the crew, still, until they finally mark off at the away-from-home terminal.

Unknown Speaker: May I ask you a question about the 1969 hearings, and you quoted Mr. Manion's statement, which I guess is the same one, at page 20 of your brief.

Mr. Mann: Yes.

Unknown Speaker: And his references to 1(b)(3)(A) in the bill that was then pending, that's what finally was enacted as subsection (5), is that correct?

Mr. Mann: That's correct.

Unknown Speaker: And am I correct in understanding that at that time the subsection (4) with the second clause in, at least, was not in the bill?

Mr. Mann: The deadhead transportation?

Unknown Speaker: Yes.

That was not yet in the bill, is that correct?

Mr. Mann: Not in the... not as it was finally passed.

Unknown Speaker: And so it is fair to infer as part of your argument, I gather, that in paragraph (4) everything after the word, but, was enacted in response to the concern expressed by Mr. Manion on page 20 of your brief.

Mr. Mann: It was... well, deadhead transportation in the originally drafted bill stated that all of the deadhead time was time on duty, so he was referring to both provisions, except when I read to you on page 135 of the House hearings, that only related to the subsection (5).

Unknown Speaker: Which was then subsection (3).

Mr. Mann: Yes.

Unknown Speaker: And (4) was amended in response to this testimony, is your position.

Mr. Mann: That's correct.

Unknown Speaker: And my question is, if you... and the question, then, is, what does the word deadhead transportation mean in that amendment, under your analysis?

The question, does it include the time waiting for the transportation to begin?

Mr. Mann: And let me address--

Unknown Speaker: Let me finish my question, please.

Mr. Mann: --Oh, I'm sorry.

Unknown Speaker: And so that's what we're trying to decide, as I understand it.

Now, if your view is correct that it does not include the period before they get on the bus, or whatever it is, how did that solve the problem he described on page 20 of the brief?

Mr. Mann: It didn't solve that problem.

They are still--

Unknown Speaker: Unless you construe it the way the Government does.

Mr. Mann: --They're still on duty.

Now, I want to point out, Justice Stevens, that another industry spokesman, a Mr. Hilt, who was the chairman of the National Railway Conference... this is the negotiating arm for the railroad industry.

He was asked, what does deadhead mean?

He said, on page 220 of the House hearing, deadheading is being transported from one point to another at carrier's orders without performing any service, and then, later in his testimony--

Unknown Speaker: But again, he's describing something before that's in the bill.

Mr. Mann: --Yes, but later he was asked by Congressman Tiernan, in regards to defining deadhead, would you say to the committee that the definition covers the complete description of deadheading, and his answer was... he didn't fully answer.

He said, deadheading is a widely used term, except management relationships is more or less the complete definition, and then Congressman Tiernan again pressed him.

He said, you don't want to add anything to the definition you gave with regards to what deadheading is, and he said, I don't think so.

So he is saying to Congress, it is only transportation in, and that's all it is, the transportation.

Unknown Speaker: Maybe he was wrong.

Mr. Mann: But that's what Congress relied on.

Unknown Speaker: No, but you still haven't answered--

--You think... how do you know that?

Mr. Mann: Well--

Unknown Speaker: You really think--

Mr. Mann: --I really think--

Unknown Speaker: --Who do you think heard that testimony?

Mr. Mann: --Who did?

Unknown Speaker: Do you think Congress heard that testimony?

Mr. Mann: Well, it was their hearings.

Unknown Speaker: How many people do you think were present there?

Mr. Mann: There were 30-some on that committee.

Unknown Speaker: Okay, so you think because 30 Members of Congress, if they were all present at the hearing, heard him say those words.

You want us to assume that therefore the statute means what he said.

Mr. Mann: It's what Congress--

Unknown Speaker: Does that seem reasonable to you?

Mr. Mann: --I do, because this committee is the one that drafted the provisions, and they relied on what the witnesses told them, and it was part of that testimony--

Unknown Speaker: They didn't pass the statute.

There are how many, 432 Members of Congress, 530, 532, something like that.

Mr. Mann: --Yes.

Unknown Speaker: They passed the statute, not the 30--

Mr. Mann: They passed it based on the representations of the chairman of the committee.

Unknown Speaker: --They did.

Mr. Mann: Unanimously, I might add.

Unknown Speaker: But counsel, even if you confine yourself to the committee members... I understand what you're trying to say.

You're not going to convince Justice Scalia on this, but you might convince me, so give it a try.

[Laughter]

How does the amendment... what I don't understand under your view, assume that all the committee members meant the amendment to solve the problem described there, as I read it, it does not solve the problem--

Mr. Mann: It only--

Unknown Speaker: --because the time between they get off the crew and they wait for the bus could run out to several hours and still cause the very violation he's concerned about.

Mr. Mann: --That's correct.

Congress didn't buy that.

That's the whole point I'm making.

The only thing they bought from the railroad industry was, we're going to give you a break on deadheading--

Unknown Speaker: I see--

Mr. Mann: --not time on duty.

Unknown Speaker: --Why would they buy that little piece of the problem?

Mr. Mann: Because--

Unknown Speaker: Why would they say, we're going to fix this part but you're in trouble for the rest?

Mr. Mann: --Because it's the abuses, Justice Souter.

They had crews sitting out there hours on end, and they still do, and the problem is, maybe there's no immediate danger to safety because they're not... the crew's not going to operate this particular train any more, but it gets cumulative.

Day-in, day-out, you're not knowing when you're going on duty, 8 hours later today, 6 hours earlier tomorrow, and it cumulates, and as I quoted--

Unknown Speaker: They have guaranteed rest period whenever they get back, and that is not shortened whether this limbo time... I mean, this limbo time doesn't go toward that.

Mr. Mann: --It doesn't, but you have... and I submit that cumulative fatigue is a cause of serious safety problems, as stated by the National Transportation Safety Board, which I've quoted, as stated by the General Accounting Office as well--

Unknown Speaker: Do they get paid for the limbo time?

Mr. Mann: --They do.

Unknown Speaker: So why do they mind?

Mr. Mann: It's a safety problem.

We're not talking about wages.

We're talking about safety.

Unknown Speaker: They still have to have the off duty.

They have to have the off-duty hours after the limbo time plus the transportation is over.

They have to have the 10 off-duty hours anyway.

Mr. Mann: That's correct.

Unknown Speaker: So why does it become... I mean--

Mr. Mann: It's not an economic problem.

That's the whole point.

Unknown Speaker: --No, no, but I mean, why is it a safety problem if when they get back they still have to have the 10 hours?

Mr. Mann: Because day in and day out, that time is not regular, and it cumulates this fatigue, and I... when you have an opportunity to look at the... and even the reports of the Federal Railroad Administration point out to the... this problem in the railroad industry, and it is definitely a cause of accidents.

Employee error causes about 30 percent of the rail accidents in this country, and a significant portion of those that were addressed by the National Transportation Safety Board involve fatigue, and both chairman of the board, as well as the vice chairman, going to Congress several times trying to get attention to this problem, and this is what Congress was trying to do, and that's why they didn't buy the amendment sought by the railroads.

Unknown Speaker: I guess the only difficulty I have with your response is, I mean, you're relying on legislative history for part of the answer, but when we get to drawing the distinction between the waiting time and the transportation time, and you're saying well, Congress bought that distinction, there's nothing in the legislative history which you were previously relying on that supports you.

Mr. Mann: They didn't change the bill.

The bill is exactly the same as what was complained of.

Unknown Speaker: But it seems... it just strikes me as odd that when they adopted, in effect, the compromise which are the... when they adopted the language following but, in what is now (4), it just strikes me as odd, if we're going to rely on legislative history, to find that there is no explanation of what you're telling us.

Why might they not have said, well, we're going to add these words following but, and we're going to put them in (4), but that does not affect the question of how we're going to treat waiting time, because waiting time is subject to abuse.

There's nothing in the legislative history record that addresses this.

Mr. Mann: Maybe not specific words, waiting time, but they addressed it clearly in two ways.

One is, which I've just mentioned, they did not change the wording at all from the introduced bill and that which was complained about by the industry.

They didn't change it at all.

Unknown Speaker: But they added that part of subsection (4).

Yes.

Mr. Mann: That's correct.

Unknown Speaker: That's a change in response to... arguably is a change in response to the concern you've identified.

Mr. Mann: Not on waiting time.

Unknown Speaker: Well, you think it isn't because it doesn't expressly say that.

It's a question of, what did they mean by deadhead transportation?

Mr. Mann: That's what--

Unknown Speaker: Did they intend to include waiting time, which would have solved the problem--

Mr. Mann: --But that's--

Unknown Speaker: --if you read it that way.

Mr. Mann: --They solved it by saying you can't get that relief that you want.

Unknown Speaker: Thank you, Mr. Mann.

Mr. Mann: Thank you, Your Honor.

Unknown Speaker: Your time has expired.

Mr. Stewart, we'll hear from you.

Argument of Malcolm L. Stewart

Mr. Stewart: Mr. Chief Justice, and may it please the Court:

In the view of the Federal respondents, time spent waiting for the arrival of a deadhead vehicle at the conclusion of an employee's duty assignment is neither on nor off-duty time.

That construction is consistent with the text of the pertinent statutory provision, and with the policies underlying the Hours of Service Act.

As Justice Breyer was saying in one of his questions, if a person is asked, how much time did it take you to travel from Washington and Boston, the question is ambiguous.

If the import of the question is, how big a chunk out of your day did the process of travel take, a person would normally answer it in a way that included associated waiting time.

If the person were known to find air travel particularly uncomfortable or unpleasant, the person might naturally infer that the point of the question was, how much time were you placed in this uncomfortable position, and might answer it in a way that included only the time actually in the air.

So to see whether waiting time should be counted as part of time spent in deadhead transportation, I think the inquiry should focus on, why did Congress define this as limbo time in the first place, and do the same concerns that caused Congress to define a category of limbo time apply with equal force to the waiting time at issue here, and for all purposes relevant to the Hours of Service Act, the time spent waiting for the deadhead vehicle is functionally indistinguishable from time actually riding in that vehicle.

Unknown Speaker: Well, what about the abuse argument?

There's no... the railroads weren't engaging in abuses while they were transporting.

They were engaging in abuses by being very unsystematic and uncaring about getting the... doing the transportation.

I think that's his argument.

What is your response to that?

Mr. Stewart: Well, a couple of responses.

I think first, as to what complaints of abuse were brought before the congressional committee that held the hearings, the union's complaints focused both on the waiting time and on the length of transportation itself.

That is, there were statements to the effect that--

Unknown Speaker: They didn't draw any distinction, you're saying.

Mr. Stewart: --No, and--

Unknown Speaker: So that the problem Congress had was a unified problem.

Mr. Stewart: --That's correct, and the Senate committee report stated that part of the problem was that an employee... several hours of an employee's off-duty time might be time deadheading back from his duty assignment, so clearly... there's no evidence in the legislative history that Congress believed that the ride in the deadhead vehicle itself was typically short, but that the waiting periods were typically lengthy, so I don't believe that the legislative history provides a basis for distinguishing between the two.

The reason that time spent in deadhead transportation is limbo time is that it shares some of the characteristics of both on and off-duty time.

That is, the employee is not free to come and go as he pleases.

The employee is unlikely to have a meaningful opportunity for rest, and therefore it would be inappropriate to count this as off-duty time and count it towards the minimum number of consecutive hours of rest that he has to--

Unknown Speaker: May I just get your view on one, kind of fundamental thing for me?

Is it... do you agree that the second clause in subparagraph (4) was inserted in response to the concern expressed by the testimony of Mr. Manion?

Mr. Stewart: --I don't know if I would say that Mr. Manion specifically, but yes, I think--

Unknown Speaker: Just generally.

Mr. Stewart: --Yes.

The original bill, the bill as originally introduced provided that time deadheading either to or from a duty assignment would be considered on-duty time, and this appears to reflect a... to define the deadheading from a duty assignment as limbo time appears to reflect a compromise that allayed the concerns of the railroads while ensuring that this would not be treated as off-duty time, thereby depriving the employee of an adequate opportunity for rest.

So because the employee is not free to come and go as he pleases, and is unlikely to have a meaningful opportunity for rest, it would be inappropriate to consider this off-duty time.

On the other hand, so long as the employee has no duties to perform, his fatigue can pose no danger to himself and others, or others, and therefore it would be inappropriate to treat this as on-duty time, and I think it's instructive to contrast this with the interim periods available for rest that Mr. Mann referred to.

That is, the reason that the interim periods are defined as on-duty time is not that the employee poses a danger during those periods himself.

That clearly wouldn't be the case if the employee is performing no services.

Rather, the reason is that if these periods are not provided at a place where an employee actually has an adequate opportunity for rest, the employee is likely to be tireder at the end of that period than at the beginning, and therefore they need to be counted as on-duty time in order to ensure that he's not performing safety-sensitive tasks more than 12 hours after he initially reported for duty.

Unknown Speaker: Do you know how many designated terminals an employee usually has?

Mr. Stewart: Well, typically, I think my understanding is that typically there would be a home terminal and an away-from-home terminal.

This is generally a subject of collective bargaining, and Mr. Johnson may have a more precise answer than I do, so that what is a designated terminal insofar as a particular employee is concerned is defined not by the act, but by the collective bargaining agreement.

Unknown Speaker: But under your view, if the employee waits for deadhead transportation after his duty, when he's off duty, and then goes to a designated terminal which is available for rest under (5), but then he's also waiting for further transportation, I take it that this is on duty, because he has a place to rest, even though he's also waiting for further deadhead transportation.

Mr. Stewart: I'm not sure if I understand the question, but our position is that after the employee has been released of the obligation to perform any duties, all of the waiting and the actual riding would be considered limbo time, and the statute speaks of--

Unknown Speaker: No, but it's on-duty time once he gets to a place other than a designated terminal and it's available for rest, pursuant to (5), or is that not an interim period?

Mr. Stewart: --That's not an interim period.

The interim periods would be those that are preceded and followed by periods of service, and again, the reason for treating those periods differently is, if you're going to have to perform services when the period is over, we're concerned about whether you're going to be tired and pose a safety hazard at that time, but if your tour of duty is up, if you're simply in the process of getting from your duty assignment to the place that you'll get your 8 or 10 hours consecutive rest, that concern is not present.

Unknown Speaker: I see.

So interim is followed and preceded by on duty.

Mr. Stewart: That's correct.

Unknown Speaker: Mr. Stewart, does the Government assert any entitlement to deference of its views in this case?

Mr. Stewart: Yes, we do.

This is... obviously, this litigation has taken a strange path in the sense that the Government is asserting a different reading of the statute than we asserted in the court of appeals, but the concerns that caused the FRA to shift its position, briefly, essentially are inapposite once the case comes before the Court.

That is, in the Seventh Circuit the Government was asserting that the interest in Nation-wide uniformity was so great as to outweigh the interest in choosing the better of the two readings as between two that the FRA considered within the realm of reasonableness.

Given that we're in this Court, and that whatever ruling this Court hands down obviously will have Nation-wide application, there's no need to balance any concern for uniformity against competing interests.

Unknown Speaker: What that would mean, of course, if we agree with you on the deference point, is that although we... if we were to find your interpretation reasonable, you could change the interpretation later.

Even if we thought yours was the more reasonable you would still be able to go to the other one.

Mr. Stewart: I think that's correct.

It would depend to a certain degree on how the Court wrote the opinion.

if the Court went out of its way to say not only is this a reasonable construction but it's in our view the only one that could plausibly be asserted--

Unknown Speaker: Now, the FRA does not have rule-making authority explicitly conferred, does it?

Mr. Stewart: --No, that's correct, as to the Hours of Service Act.

Unknown Speaker: And there is a circuit conflict, is there not, on whether agencies that do not have rule-making authority are entitled to deference?

Mr. Stewart: I think there is... there are... this Court has accorded--

Unknown Speaker: We've reserved the question, haven't we?

Mr. Stewart: --Right.

Unknown Speaker: You don't want us to decide that in this case, do you?

Mr. Stewart: I think because our... clearly, we believe our reading of the statute is the better of the two, and if the Court--

Unknown Speaker: I think... do I understand you right to be saying that you're not talking about the Chevron kind of deference, because there's no delegated rule-making authority here, right?

Mr. Stewart: --That's correct.

The FRA is entrusted with the responsibility for assessing civil penalties, but it is not given substantive rule-making authority.

Unknown Speaker: So you're talking about the Skidmore kind of deference where the agency, because it's been in the business, where the Court would look to the persuasiveness of its reasons that's kind of a--

--Is that what you were talking about?

I was talking about Chevron deference.

I would have to rephrase my question.

Mr. Stewart: I under--

Unknown Speaker: You understood me to mean Chevron deference, didn't you?

Mr. Stewart: --Yes, I did.

Unknown Speaker: Let me just throw this into the discussion.

Which opinion, Judge Bauer's or Judge Easterbrook's, do you think better explains your position on deference?

Mr. Stewart: Well, part of the problem with that is that in the--

Unknown Speaker: If you have an answer.

Mr. Stewart: --I don't have an answer, because I think neither really goes to the question.

That is, at this point, in the court of appeals the question of deference arose in the context of the FRA's argument that it's concern for Nation-wide uniformity was so great as to trump its view as to what was the better reading of the statute, and we... the FRA in the court of appeals asked that court to defer to the FRA's view regarding the importance of Nation-wide uniformity as opposed to the importance of getting the better of the two answers, so the two opinions were addressed to that sort of deference.

Here, what we're talking about is deference regarding the FRA's view as to what is the more persuasive meaning of the statutory language, so the types of things that Judge Bauer and Judge Easterbrook were debating really are not particularly germane to this Court's resolution of the question.

Unknown Speaker: They're like ships passing in the night, I guess.

Mr. Stewart is there anything in the record that indicates why the Government didn't appeal the Ninth Circuit and try to reconcile its views of the better interpretation with national uniformity that way?

Mr. Stewart: There is nothing in the record.

I think--

Unknown Speaker: I don't wish to go outside it.

I just wondered whether there was anything in it.

Mr. Stewart: --I would only remark that it was the first court of appeals ruling that had addressed the question, and it would be... there would be nothing in this Court's rules, obviously, that would preclude us from filing a cert petition or the Court from granting it, but it would not be consistent with the Court's normal practice.

Unknown Speaker: Well, why didn't you then... I mean, if you still persisted, I mean, why isn't the answer, that is, if you still persisted in thinking the other view the better one, why wouldn't it have been worth the Government's while at least to persist in one other circuit to get a conflict and get the thing up here?

Mr. Stewart: Again, these go to questions of both litigation strategy and also the FRA's view as to the importance of uniformity as of a particular moment.

Certainly a reasonable person could believe that that would have been the better course.

Obviously, the reasonableness of that decision is not before the Court at this stage.

Unknown Speaker: You do agree that, if there's any duty assigned, like watch the train to see that there's no vandalism, that that's full on-duty time.

Mr. Stewart: That's correct.

With respect to the vandalism point, I would like to distinguish between two types of instructions that an employee could be given.

If the employee were told, watch for vandalism, be alert, be vigilant, that is clearly on-duty time.

If the employee were told, you can do whatever you want, read, play cards, sleep, but if you happen to see vandalism you have an obligation to report it, we wouldn't regard the reading, sleeping, et cetera time as on-duty time, but if vandalism happened to catch the employee's eye, and he reported it pursuant to instructions, that act would be on duty.

Unknown Speaker: He could be given those instructions for rest time, too, I assume.

Mr. Stewart: That's correct, and even if there were no identified contingency that would call the employee back into duty, these people are always in radio contact with supervisors.

The possibility would always exist that a supervisor would give an instruction to the employee to do a particular thing, so whenever the employee is in this waiting period, there always exists the possibility of being recalled to duty whatever the instructions he was given at the outset of that period.

The only other point I'd like to make is that I think our reading of the statute is buttressed by the other point at which time spent in deadhead transportation is used in the same section of the Hours of Service Act.

That is, the act provides that time spent in deadhead transportation to a duty assignment is considered time on duty, and I feel quite certain that the union would state that time spent in deadhead transportation to a duty assignment includes any waiting period between the time that the employee reports and the time that the deadhead vehicle is actually ready to go.

That's buttressed by the structure of the statute and by the legislative history, which the Senate report states that time spent in deadhead transportation to a duty assignment is to be calculated from the time an employee reports for duty, so this gives further confirmation of the fact that the waiting period is properly included within the phrase, time spent in deadhead transportation.

Thank you.

Unknown Speaker: Thank you, Mr. Stewart.

Mr. Johnson, we'll hear from you.

Argument of Ronald M. Johnson

Mr. Johnson: Mr. Chief Justice, may it please the Court:

Before the Ninth Circuit ruling, there was... the statutory scheme was administered in a very straightforward, simple manner, predictable and certainty for the railroad in how to schedule crews and operate their trains.

The very simple rule that the Hours of Service Act provided was that you could operate the crew up to 12 hours, but if you realized, if you saw that the train was not going to make its intended terminal, all you had to do to avoid a violation of the act was notify the crew to identify a place where they could pull over, park the train, and then they were relieved from all other duty.

At that point, all they had to do was wait for transportation to arrive, which typically also brought the relief crew as well.

The relief crew got on the train, took the train on to its terminal, then the expired or outlawed crew would be transported to its place of final release.

Now, one thing I'd like to make clear right here is--

Unknown Speaker: What do you call them?

You call them an outlawed crew?

Is that the industry terminology?

Mr. Johnson: --There's a lot of industry jargon, Your Honor, and the crew is outlawed at that point in time.

The crew sometimes sent out to pick it up was called the dog-catcher, to pick up the outlawed train.

[Laughter]

Now, one thing I'd like to point out here is a difference between us and the unions, one among many differences, is that they try and argue that under the statute the crew is on duty until it reaches its place of final release, which is the terminal that it didn't make, but that's not the way the statute works.

The language is quite clear that on duty runs from the time you report for duty until you're finally released from duty, and you're finally released from duty under the statute when the railroad dispatcher advises the crew you're relieved from duty, don't do anything else.

Now, I believe in response to a question from Justice Breyer was asked, are these crews paid while they're in limbo time, and the answer is yes, they are paid all throughout this time.

They're paid while they're waiting for deadhead transportation.

They're paid while they're in the deadhead transportation vehicle.

They're paid until they get to their final terminal.

Unknown Speaker: What about the period of time when the employee reports to go on duty, and is waiting for transportation to the duty station?

Mr. Johnson: Well, they're paid at that point in time, too, Justice O'Connor.

Unknown Speaker: For the waiting period?

Mr. Johnson: Yes, and actually they're paid a little extra amount, because--

Unknown Speaker: And are they considered on duty during the waiting period?

Mr. Johnson: --Yes, Your Honor.

From the time they report to duty... I mean, typically there's a train... they try and schedule it so the train is there ready for them to get on board and go on, but if the train hasn't come in yet, that time period they're waiting to assume duty and that's counted as on-duty time.

But to come back to the point I was going to make about the pay, all that happens at the place of final release, they don't have any more duties because they've been relieved from duty on the train, they have no duties while they're waiting for deadhead transportation, they have no duties while they're in the taxicab or the van, or another train, perhaps, but they're being paid, and when they get to the place of final release, all that is, is they clock out.

That's all final release means.

When they get to their terminal, they clock out.

That stops the pay, and it starts their rest period, because the railroad has to know when the rest period begins so they can be called again.

Now, there aren't any abuses here.

I know the union attorney talks about abuses in the record, but there really is no record here other than what was put before the agency by the railroads, because the union did not put anything in the record other than the stuff they've attached to their briefs.

But even if there were abuses here, the abuses were whatever they were related to deadhead transportation, and they've all been addressed by the fact that waiting for deadhead transportation and the deadhead transportation itself is not counted towards the rest period, and therefore, when they get to the end, when they get to the place of final release, they get their full rest period.

Now, it's been very hard for the railroads to try and comply with this new interpretation, and that is why the railroads went to court.

It is impossible to always predict, now... before, you could simply predict that when the train would be outlawed, you could just tell the crew to stop.

You wouldn't violate the law.

The only variable you had to have was to pick a place where they could pull the train aside off the main line onto a siding.

Now, you have to try and predict not only where they're going to reach the 12-hour maximum, you have to also work in other variables.

You have to call transportation, try to get transportation to meet a place before the 12 hours... it just can't be done.

Unknown Speaker: What penalties are there for violating... I mean, I can imagine you might have a snowstorm or something, and you can just stop the train, but if that unforeseen delay causes your crew to be on duty longer than you had expected, what would the penalties be?

Mr. Johnson: Well, the penalties, the minimum penalty to be imposed is $500 per violation.

The maximum penalty is $20,000 per violation.

The violation, each crew member is a violation, so if you have three members on the crew, that's three violations.

That would be three times whatever the amount is.

Now, the agency has discretion above $500 how much to impose.

Currently, what they've been imposing is $1,000 per violation, so each of these crews typically has a crew of two or three people, it's $2,000 or $3,000 per violation.

Now, the problem here is, it's impossible--

Unknown Speaker: Of course, they might make an exception for snowstorms.

You know, even if we adopted the union's view of the matter, there... couldn't we count on the agency's discretion not to impose the penalty when indeed the reason the excessive time occurred was simply some unforeseen event such as a snowstorm?

Mr. Johnson: --Yes, Your Honor.

They have that... I think it's a matter of prosecutorial discretion, and also there's a specific exception in the statute for emergency situation acts of God.

But what's happening right now in the Ninth Circuit, because they still feel compelled to apply this interpretation of the Ninth Circuit, in the States within the Ninth Circuit, the railroads are continuing to be assessed violations for this waiting time.

Even though the waiting time periods are as little as 5 minutes, we're still being faced with penalties right now.

Now, I'd like to talk briefly about interim rest periods.

It's clear that interim means you're between points of duty, and all that Congress was trying to get at when they put interim... when they defined what interim periods of rest were in the statute is, the case law before 1969 was all over the place.

You know, some courts would say 2 hours works, some courts would say 3 hours works.

All Congress did was codified that it has to be at least 4 hours, and it has to be at a certain place where accomodations are available for rest.

Now--

Unknown Speaker: May I ask to whom the penalties are paid for violations?

Mr. Johnson: --The penalties are paid to the United States Government.

I assume they go into the Treasury, Your Honor.

Now, the current interpretation that the union wants just makes no sense, because the crew has been relieve from all duties, has no duties, but yet they would have that crew continue to be counted as on duty even though they're not physically on the train, even though they have no further duties.

It just doesn't make any sense.

There's no safety problem here because the crew is not going to be allowed to operate a train again until after they've received their full rest period, and--

Unknown Speaker: Well, of course, I mean, you know, an argument can be made for the other side.

The argument is... what is the rest period that's... what's the minimum rest period?

Mr. Johnson: --The minimum rest period is 8 hours.

If they work right up to the maximum of 12 hours, it is 10 hours under the statute.

Unknown Speaker: Okay.

Mr. Johnson: Now, that rest period doesn't begin... what happens when they reach... you know, there's all this railroad industry jargon in the statute, but again, the place of final release simply means the building that they walk into when they clock out.

That means they're going to begin their rest period, and what they do then is, if they're... I believe one of the justices asked how many terminals they have.

They have the home terminal... the home terminal, of course, they live at their home, but when they get to their away-from-home terminal, the railroad has made arrangements... it's in the collective bargaining agreement.

This is all treated in the collective bargaining agreements... has made arrangements for a hotel to go to and stuff, and that's where they get their rest.

Unknown Speaker: Okay, but doesn't this scheme of the statute show that Congress thought that an 8-hour rest period is needed for a... what, 10-hour normal work period?

Mr. Johnson: Yes, Your Honor.

Unknown Speaker: But a 10-hour rest period is needed for a 12-hour work period, is that right?

Mr. Johnson: Yes.

Unknown Speaker: So the law... you can't say there's just an absolute rest period which is going to be a balm for all ills, no matter how long you've been on... you know, working before then, and what the union is saying is look, realistically, traveling, deadheading back is... it takes it out of you, and if I should get 10 hours' rest for 12 hours' duty, I should also get 10 hours' rest for 10 hours of duty plus 2 hours of deadheading back, including the waiting time for the deadheading.

I don't know that that's an unreasonable argument.

I mean, the minimum time is a minimum time that has been calculated on the basis of what the maximum duty time was, and if that duty time is stretched out, maybe... you know, maybe the minimum time should be more.

Mr. Johnson: Your Honor, they have a way to get that, and the way they get that is expressly addressed in the statute, and that is through collective bargaining.

Congress specifically says in section 2107 of the Hours of Service Act that these are minimums, and nothing is to stop the parties from sitting down and collectively bargaining longer rest periods, and--

Unknown Speaker: This is a safety issue, they say, and Congress... you know, Congress was concerned with safety.

Mr. Johnson: --That's true, Your Honor, and Congress, though, has made the judgment that safety is satisfied here.

If we limit the crews to 12 hours on duty, if we make transportation time limbo time, and if we mandate a minimum rest period of 8 hours, Congress has made a judgment that that satisfies the safety concern, and if the parties want to go beyond that minimum they can and, in fact, they have, and some collective bargaining agreements provide that the minimum rest period is, in all instances is 10 hours rather than 8 hours.

And the safety issue, though, here that the unions are complaining about is not the safety issue of waiting time, it's not the safety issue of how long the day is.

You read their brief, and over and over and over again, the safety problem they're worried about is fatigue from irregular work hours, upsetting Circadian rhythms because crews are being called at all hours of the day and night to man trains, and that's true.

That's the way the railroad business works.

But that is not a safety issue that's addressed by this statute, because even if you counted waiting time as limbo time, that doesn't affect the fact that the crew, when it gets back and after it's had its rest, could be called again at any hour of the day or night to man that train.

Unknown Speaker: Indeed, it's purely fortuitous whether it helps that problem or hurts that problem.

It could help it.

Mr. Johnson: That's correct, Your Honor, and again, the parties are meeting together in task force to address the safety issues that may result from these irregular work schedules, and Congress last year did add an amendment to the Hours of Service Act that encouraged the parties to work together to develop a solution, if there is a problem here, on irregular work hours.

But there's not a safety problem here with treating waiting time as limbo time, and the Government made a reasonable choice in a somewhat ambiguous term whether to treat it... that's one difference we have with the Government.

We believe there are only two options on how to treat this waiting time.

It can either be treated as off-duty time or limbo time, and the Government made a reasonable choice to treat it as limbo time.

That's the way this statute has operated for more than 20 years, and we believe that's the correct application of the statute.

Unknown Speaker: May I ask one very important question?

The term dog-catcher refers to the crew that picks up the outlawed crew, or to the crew that substitutes for it?

Mr. Johnson: That picks... that refers to the crew that comes out from the terminal to pick up the train that got outlawed because it fell short of its final destination because the first crew outlawed--

Unknown Speaker: So they're the substitute crew.

Mr. Johnson: --They're the substitute crew, Your Honor.

Unknown Speaker: Thank you.

Mr. Johnson: I thank the Court.

Chief Justice Rehnquist: Thank you, Mr. Johnson.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Consol. Rail Corp. v. Railway Labor Executives - Oral Argument

Sun, 06 Feb 2011 03:46:48 +0000

Case:

Consol. Rail Corp. v. Railway Labor Executives

Media File:

88-1_19890228-argument.mp3

Related Transcript:

88-1_19890228-argument.xml

Transcript:

ORAL ARGUMENT OF DENNIS J. MORIKAWA ON BEHALF OF PETITIONER

Chief Justice William H. Rehnquist: We'll hear argument first this morning in No. 88-1, Consolidated Rail Corporation v. Railway Labor Executives' Association.

Mr. Morikawa.

Mr. Morikawa: Thank you.

Mr. Chief Justice, and may it please the Court:

At issue today is the right of Conrail's Medical Department to continue its longstanding practice of establishing and maintaining the standards by which its employees will be deemed medically fit for duty.

The standards have always included Conrail's right to require that its employees submit to physical examinations, the purpose of which is to determine these employees' fitness for duty.

These examinations have routinely been required throughout Conrail's history as part of its regular business.

The focal point of this litigation then is the addition by Conrail of a drug test to these routine physical fitness examinations.

It is our contention this morning that the addition of that drug test was at least arguably related to the general fitness for duty standards which Conrail had the right to maintain, as it had over the years.

And, as a result, the challenge by the unions to the addition of this drug test to the physical examinations represented a claim which should have been resolved in the statutory adjustment process of arbitration provided under the Railway Labor Act.

We will demonstrate that the lower court exceeded the limited judicial role which the courts play in the process of determining the proper forum in which these disputes are to be resolved because in this case, we contend, that the lower court proceeded to decide the merits of the underlying dispute and in that process exceeded that role which the courts have clearly carved out in determining whether minor disputes exist in this... under the Act.

Now, I'd like to take a moment to examine Conrail's longstanding medical fitness for duty practices that have existed since 1976, the year when Conrail was first created, because we believe that these facts amply demonstrate the particular reasons why Conrail contended in the first place that the addition of the drug test was clearly related to its fitness for duty determinations.

First of all, since 1976, at the time Conrail first came into existence, the railroad had a Medical Department which determined standards for employee fitness.

Throughout the history of Conrail the Medical Department has had the discretionary right to always determine fitness-for-duty standards, part of that being the inclusion of these kinds of physical examinations.

Not--

Unidentified Justice: Is this... is this pursuant to a collective bargaining agreement, Mr. Morikawa?

Mr. Morikawa: --No, your Honor, it was not.

It was pursuant to the general policies that were implemented at the time that Conrail was created.

But it was never bargained over with the unions.

In fact, the whole issue of medical fitness-for-duty standards has been a subject which traditionally in the railroad industry has not been a subject over which the railroads and the unions have bargained.

Unidentified Justice: Mr. Morikawa, I gather that before 1987 the medical screening did not include testing for drug use except on the basis of particularized suspicion.

Is that right?

Mr. Morikawa: The lower court in this case characterized the kind of drug testing that had been done as being done on particularized suspicion.

And, frankly, your Honor, we're not quite clear what that term really means in the context of a physical examination.

Unidentified Justice: But we accept that as the case, do we not?

Mr. Morikawa: As a matter of fact, we believe that if you look into the practices of the parties that did exist, it included not just testing at the discretion of a physician, as in that situation, but it also included drug testing that had been done by Conrail on a broader base in 1984 when for a period of six months it implemented drug testing across the board and part of these routine physical examinations.

Unidentified Justice: Do you see any limits on the tests that Conrail could require for medical testing?

Could it test... initiate testing for AIDS or pregnancy, for example, in the urine specimens without characterizing it as a major dispute?

Mr. Morikawa: We contend that Conrail had the right to determine fitness for duty, as it had been its practice.

Unidentified Justice: Uh-huh.

Mr. Morikawa: The question of whether or not AIDS relates to fitness for duty is certainly problematic.

Or pregnancy, as to whether that relates to fitness for duty.

The question, however, is that the Medical Department has seen fit to develop various standards over the years which in its judgment it felt appropriate to the question of employee fitness.

As a consequence of that, the Medical Department, we contend, has had the right and must continue to have the right, based on these practices, to be able to respond to emerging threats to employee fitness for duty.

And in this particular situation, whether or not pregnancy or AIDS would represent a fitness for duty threat we don't know at this point, but we believe that the Medical Department should have that right to make determinations.

Now, I'd like to continue on--

Unidentified Justice: Well, their system didn't work very well with respect to the Maryland disaster, did it?

Mr. Morikawa: --It certainly did not, your Honor.

One of the problems that occurred at the Chase, Maryland accident on January 4, 1987 was the discovery consequently by the National Transportation Safety Board that the Conrail engineer and breakman involved in that collision had been using marijuana just prior to the accident.

And I think this highlights one of the critical problems that we've had to face with respect to the drug issue.

I think it was quite well known at the time that when Ricky Gates, the engineer of that Conrail engine, left the Baltimore Yard he was seen by a trainmaster who testified later that Ricky Gates seemed normal, did not seem to have any apparent problem or difficulty.

And yet 15 minutes later the consequential crash occurred in the Northeast Corridor.

This highlighted in our minds the major problem that we had with respect to the question of drugs.

The difficulty of detecting drugs and yet its profound impact on employee fitness and on performance of our employees.

Unidentified Justice: Now, you have a new test out, I'll put it that way.

To what extent does the desired test differ in any way as far as the individual is concerned from what it was before the test for drug was instituted?

The blood is drawn... is it any different with respect to the individual?

Mr. Morikawa: The test that's involved in this case, your Honor, is a urine sample, not a blood test.

Unidentified Justice: Yes.

Mr. Morikawa: But the urine sample was required to be taken as part of the routine physical examinations back to 1976.

So, this test has always been part of the physical.

Unidentified Justice: But the patient does nothing any different now than he did before the test was refined?

Mr. Morikawa: That is precisely correct, your Honor.

The only thing we did in this case was to add another test to the existing urine sample to test for the existence of drugs under the circumstances.

Unidentified Justice: And I suppose this is to be anticipated as medicine develops and we find out more about urine and its possibilities.

Mr. Morikawa: To give you one example, the issue of cocaine has always been a profound problem in the industry and in the public at large.

Only eight or nine years ago magazines were touting the fact that cocaine was a major new drug which had come on the scene and that people could use it and they could use it to their pleasure without worrying about the problems of addiction related to cocaine.

Seven or eight years later now, we now determine through the medical industry that cocaine... it may be the most addictive drug in the market today and may represent the greatest threat to employee fitness.

So, you see that the whole concept of medicine and the way it addresses certain kinds of problems constantly evolves in changes.

And in our situation we felt that it was necessary to be able to have the Medical Department be in a position to be able to respond to these kinds of changes in employee fitness questions.

Unidentified Justice: Mr. Morikawa, is the consequences of being unfit for duty for medical reasons... are they determined by the collective bargaining agreement or are they set by the railroad?

Mr. Morikawa: The consequences of being determined unfit for duty are determined by the past practices between the parties in this case.

Unidentified Justice: And what were the consequences before this change?

Mr. Morikawa: An employee who was disqualified based on a medical condition was disqualified from duty and was not paid until that same employee was requalified to go back to duty.

Unidentified Justice: And have those... are those same consequences attached to failure of this test a couple of times?

Mr. Morikawa: Yes, your Honor.

That same situation occurs here.

An employee tests positive for drugs, is immediately disqualified, and is not paid, similar to all other conditions.

The slight difference in this situation, however, is that we have developed a response to deal with the question of drugs.

One of those responses is we have devised a network for providing drug counseling and assistance to employees, recognizing the drug-dependency problem that can exist--

Unidentified Justice: And what happens if the employee fails two or three times?

Mr. Morikawa: --The employee goes into the program.

There are two components to the program, as we have it.

One is the counseling program.

The employees work with drug counselors, and not a single employee has ever been disciplined in that program at all.

The other aspect of the program is a 45-day aspect.

And that simply says this.

If you are not dependent upon drugs, what the Medical Department says is: If you have drugs in your system, we don't want you coming back to duty.

So, the 45-day period was addressed by the Medical Department recognizing the fact that drugs potentially could stay in a person's system for up to 45 days.

The employee in this situation who tests positive can test as many times as he or she wants to do in the 45-day period.

If they test negative, they go back to work.

If they test positive, nothing happens.

Unidentified Justice: Will they ever get to the point where they are discharged?

Mr. Morikawa: The end of the 45-day period could occur conceivably in which an employee refuses to test negative for the existence of drugs.

And under those circumstances the employee has in our view taken choice.

That is, he said that he is not going to provide a urine sample that is clean of drugs in order to go back to--

Unidentified Justice: Well, see, he's willing to provide the sample, but it doesn't turn out to be clean.

Mr. Morikawa: --Another aspect of the program is this--

Unidentified Justice: Well, I'm trying to find... is there a point where he'll be discharged?

Mr. Morikawa: --There is a point in this process in which an employee who is unable... who does not provide a clean urine sample can be dismissed.

But we contend that--

Unidentified Justice: Now, was that true before under your old practice that you say this is just continuation of?

Mr. Morikawa: --Employees have for years been required by the Medical Department to comply with its rules and regulations and instructions.

And employees have in the past, for example, been disciplined or dismissed for falling to show up for a physical examination.

Unidentified Justice: Well, I understand.

But, say, somebody got pneumonia and he came... he thought he was well and he took a test, and no, you're not healthy enough to go back in to work.

And then he comes back 45 days later and fails again.

Would he be fired?

Mr. Morikawa: That employee would-probably be treated by the Medical Department given the fact that that was a physical condition that was affecting that employee.

I think the comparison, your Honor, if I can make that, is this.

Employees who have an affliction... that is, are drug-dependent... are the real core of employees to be compared to the employees who are suffering from physical problems and maladies.

As to those employees, our program provides assistance, counseling, and treatment.

As to employees who say they are not drug-dependent, our contention is that these employees are being told by the Medical Department simply to stop using drugs.

That's a voluntary act on the part of the employee.

He or she has a choice, to get the drugs out of their system or not go to work under the circumstances.

So, the volitional and non-volitional side of drugs is the way that this has been reflected in the program.

Unidentified Justice: Well, I'm not so much concerned about whether it's volition or not as whether it's a continuation of the past practice or if there is a significant change.

And I think arguably it would be a significant change if the failure of this test could result in discharge while the failure of the prior test would just result in waiting another week or two to go back to work.

Mr. Morikawa: Well, certainly, our contention in this case is that the purpose of this program... and, in fact, the practical effect of this program, has not been disciplinary at all.

Unfortunately, what the court did in this case--

Unidentified Justice: But aren't you trying to get people addicted to drugs off... off the line?

Mr. Morikawa: --We certainly are trying to prevent employees from using drugs in the industry because we believe it affects fitness.

But the problem we see here is that in determining the existence of the minor dispute in this case by determining the practical impact, the court in this case went beyond its limited role.

It determined that because the impact... potentially... of the use of drugs was different than it conceived the prior impact of other physical conditions, that this would change the question of whether or not Conrail's position was even arguable.

I think that's the important focal point of this case.

What we are contending in this case is--

Unidentified Justice: Is there a statute that we're dealing with here?

What?

Mr. Morikawa: --The Railway Labor Act, your Honor.

Unidentified Justice: What provision are we talking about?

I mean, you've been talking for half of your time now and I don't even know what statutory standard is supposed to be met or not.

What language of the statute are we talking about?

Mr. Morikawa: The statutory language we're discussing is contained in two sections of the Act, Section 27 and Section 6 of the Act.

Unidentified Justice: Where are they in the materials we have?

Mr. Morikawa: They are at the end of the materials in your materials, at page... beginning at page 131 is a list of the provisions of the Act.

Unidentified Justice: 131 of what?

Mr. Morikawa: Of the Joint Appendix.

The Section 2 Seventh is contained at page 134 of the Joint Appendix and provides,

"no carrier, its officers or agents shall change the rates of pay, rules, or working conditions of its employees, as a class as embodied in agreements except in the manner prescribed in such agreements in Section 156. "

which is Section 6 of the Act.

Requiring--

Unidentified Justice: Now, is that a minor dispute section?

Mr. Morikawa: --The question of minor dispute, your Honor, is not found in the Act per se.

Implicit in the Act--

Unidentified Justice: Well, isn't that... isn't there a question here whether we have a major dispute or a minor dispute?

Mr. Morikawa: --That is correct.

Unidentified Justice: If it's a major dispute, there's jurisdiction.

If there's a minor dispute, there is not--

Mr. Morikawa: That's correct.

Unidentified Justice: --in the district court.

And it was held below that it was a minor dispute?

Mr. Morikawa: That is right, your Honor.

Unidentified Justice: And therefore no jurisdiction in the district court?

Mr. Morikawa: That's correct.

Yes.

The court... forgive me.

Unidentified Justice: In this... disputes in this drug testing program, may not some be minor and some be major?

Mr. Morikawa: We contend that the disputes regarding the right of Conrail to add drug tests, or the particular details of the effect that the drug may have on particular employees are matters for arbitration.

Unidentified Justice: Minor disputes?

Mr. Morikawa: They are minor disputes.

Unidentified Justice: Uh-huh.

And the court of appeals held--

--They were major.

Mr. Morikawa: They were major.

Unidentified Justice: And the district court?

Mr. Morikawa: The district court concluded it was a minor dispute.

What the district court did in this case... and I think this is a good place to focus on what the court did... the district court looked at the totality of the circumstances of the past practice and they focused on the precise issue that we began with today.

They looked at Conrail's ongoing practice--

Unidentified Justice: Forgive me.

Don't they look at whether or not... a subject matter in any respect of the collective bargaining agreement if there is one?

Mr. Morikawa: --They attempt to examine whether in the past practices of the parties the change that is being sought here has any plausible relationship to--

Unidentified Justice: Well, doesn't the existence or not of a collective bargaining agreement bear on whether you have a major or a minor dispute?

Mr. Morikawa: --It conceivably can.

In fact, the whole question is if the dispute is over an agreement or a past practice, then it is a minor dispute because that's your classic issue that goes to arbitration.

Unidentified Justice: How do we know that?

What is minor and major a shorthand for in the statute?

The statute doesn't say major or minor, does it?

Mr. Morikawa: In Section 3 of the Act, Justice Scalia, our provision--

Unidentified Justice: I really would like to know what language of the Act we're talking about here.

Mr. Morikawa: --Okay.

Unidentified Justice: What language of the Act is equivalent to a major dispute?

What language of the Act is equivalent to a minor dispute?

That will help me to understand what major and minor is supposed to be.

Mr. Morikawa: Okay.

Your Honor, the language of the Act pertaining to major and minor disputes... there is no... there is no proviso for major and minor disputes in the Act.

That's a court-made concept.

Unidentified Justice: Well, but it's based on the language of 152 Seventh and 153 First.

I mean, the Elgin, Joliet, & Eastern--

Mr. Morikawa: Correct.

Unidentified Justice: --case didn't just go off totally--

Mr. Morikawa: That's right.

Unidentified Justice: --into the air.

[Laughter]

Mr. Morikawa: The court in Elgin read into the Act two distinct kinds of matters or disputes that can arise.

The first being major disputes which are disputes over new conditions in the future, new agreements.

And those are provisions which would be governed by Section 6.

The other aspect of these kinds of disputes are minor disputes.

The larger number of disputes that occur day to day between carriers and unions.

Unidentified Justice: What was the basis for this distinction?

What statutory language was the basis for this distinction?

Mr. Morikawa: Section 3 of the Act, 153 of the Act, which provides for the Statutory Adjustment Boards to determine disputes that arise daily between carriers and unions.

Unidentified Justice: And that's the operative language?

Mr. Morikawa: That's correct, your Honor.

Unidentified Justice: Where... where is that found in your joint Appendix?

Mr. Morikawa: It's found at page 138 and 139.

If you proceed through Section 3 of the Act, to page 141, we see the various provisions of the Act pertaining to the authority of the various Adjustment Boards to resolve disputes between employees and certain unions and the carriers.

And what Elgin read into that was the understanding that these kinds of disputes, minor disputes, would be resolved through the provisions of the Act in Section 3 by one of these designated statutory Adjustment Boards.

Unidentified Justice: No particular phrase or clause?

Just... just from the whole... I mean, it goes on for a number of pages... and one reads all of that and gets a notion of minor dispute?

Mr. Morikawa: That's essentially correct, your Honor.

The court looked into the provisions of the existence of the Adjustment Boards and read into that the fact that these kinds of disputes would be resolved by these Adjustment Boards, and that's precisely why they were created.

Now, the issue involved in this case, in terms of the lower court's decision, pertain to the court's conclusion that this was not a minor dispute, but in fact a major dispute.

And we believe what drove the court's decision was drug testing standing alone.

In the court's opinion, the lower court concluded, that because drug testing was so controversial, was so full of practical dilemmas and problems, it looked back... it caused it to look back into the past practices of the party, and instead of looking at the overall right which Conrail had to determine fitness for duty, it focused only on one narrow portion of the past practice involving when Conrail had tested based on what it described as particularized suspicion.

By doing that, we contend--

Unidentified Justice: When you say "what it described", you mean the court or Conrail?

Which is the antecedent?

Mr. Morikawa: --The court described that as particularized suspicion.

As I mentioned earlier, there is no concept of particularized suspicion in the medical community or in our Medical Department.

Physicians do not test on particularized suspicion.

They examine employees and they determine solely whether or not that employee may have a detectable condition.

Now, in this situation what the court did then was to do essentially what we often ask the arbitrator to do in the process of adjustment.

We ask the arbitrator to determine whether or not this new policy was in fact justified by the old, whether or not drug testing is important or not, whether or not there is some impact, for example, on employees.

Because the point that needs to be emphasized here is... in this situation the Court's role is only to determine the forum for deciding the dispute, not whether somebody gets a resolution of the dispute.

Unidentified Justice: And I take it that this Adjustment Board itself can determine that it's a major dispute after it hears the evidence?

Mr. Morikawa: The Adjustment Board could determine precisely that.

It could say... it could contend in its findings, for example, that the drug testing program, as involved in this case, was not in fact justified by the prior practice.

Unidentified Justice: Is there explicit statutory authorization for that authority?

Mr. Morikawa: There is no specific statutory authorization to determine a major dispute per se.

What the Adjustment Boards do is they simply determine the dispute in question between the carrier and the union.

And in doing that, they determine whether or not that practice was in fact justified.

The issue of major and minor, again, is a court-ordered decision.

That is, a court determination which has been developed in a series of circuit courts.

Unidentified Justice: But I thought that at some point the Adjustment Board could say,

"We've concluded that this is a major dispute and, therefore, that it is not within our purview to resolve. "

Am I incorrect?

Mr. Morikawa: The characterization of what the Adjustment Board finds I think is incorrect in this respect... the Adjustment Board solely determines whether or not the current practice was justified by the prior practice in the course of deciding the grievance.

But it doesn't make a specific finding that a major dispute exists or a minor dispute exists in the process.

Unidentified Justice: Yeah, but it does decide whether it's within its jurisdiction.

Mr. Morikawa: It certainly does do that.

Unidentified Justice: And that's really... and if it thinks it's a minor dispute, it will decide it.

If it isn't a minor dispute, it won't.

Mr. Morikawa: Well, it would decide in either event.

For example, in other cases involving special boards of adjustment where they have considered the use of certain kinds of detection devices, the courts have seen fit to address the question of whether use of detection devices in aid of a rule was in fact justified by the prior practice.

But in concluding that they weren't, in some case, in a senses, your Honor, they are deciding that this was not justified and, therefore, it was not a minor dispute.

But, by the same token--

Unidentified Justice: And not arbitrable.

Mr. Morikawa: --And in a sense not arbitrable.

But the Adjustment Board still was making a determination based upon a review of the past practice and the charge sought by the carrier.

And I think that is a critical component of the error of the court below in this case.

Unidentified Justice: But Mr. Morikawa, can I go back to Justice Scalia's concern about the statute?

Your argument seems to proceed as though this is all a judge-made doctrine.

But isn't it true that paragraph 7 says in so many words that the carrier cannot make a change in the rates of pay, rules, or working conditions of its employees as a class except by following the bargaining procedure.

That is the definition of a major dispute, is making a change prohibited by that section unless you follow a certain procedure, isn't it?

Mr. Morikawa: That is essentially correct.

Unidentified Justice: That--

Mr. Morikawa: That's the operative provision that talks to that.

Unidentified Justice: --And so you have to convince us that this is not a change in rates of pay, rules, or working conditions of its employees as a class.

That's the issue, isn't it?

Mr. Morikawa: Essentially correct.

That was part of the complaint below, that the action of adding the drug test was a change in the agreements between the parties with respect to--

Unidentified Justice: As a class and affecting the entire population, as opposed to a minor dispute with a particular employee who claims that he did or did not... or, there was or was not a violation of the collective bargaining agreement.

Mr. Morikawa: --That's correct.

Unidentified Justice: And why isn't this precisely that kind of change?

Mr. Morikawa: It's not that kind of change, your Honor, because, as the courts have long recognized... a number of circuit court decisions which have considered it... if you are doing something which is consistent with your past-practice, that is at least arguably related to your past practice, then you have not made a change which violates Section 2 Seventh by definition.

And, by the same token, if it is a minor dispute, the courts... the cases recognize that the carrier has the right to continue to take that action whether or not it is subsequently bargained over between the parties.

This gets into the issue of the status quo that is supposed to exist at the time that bargaining occurs, for example.

This Court in Shore Line--

Unidentified Justice: Mr. Morikawa, I know you haven't wanted to talk about this.

But if you're going to talk about it, I would think you would want to emphasize the phrase "as embodied in agreements".

It's not just changes in rates of pay, rules, or working conditions of employees as a class.

But it's changes of pay... in rates of pay, rules, or working conditions as embodied in agreements.

And I suppose your argument is that unless the agreement specifically provides for something which the employer wants to change then it's a minor dispute.

If he wants to change the actual specific provision of the agreement, then you need a new agreement and that goes to the major bargaining provisions of the Act.

Isn't that the language that's crucial for you?

As embodied in agreements?

Mr. Morikawa: --As embodied in agreements certainly is the concept that we're discussing here.

As embodied in agreements... the language of embodied in agreements as interpreted by this Court has also been intended to include prior practices and customs broadly conceived between the parties that have been in existence at the time.

So, as a consequence--

Unidentified Justice: And even if not spelled out?

Mr. Morikawa: --Even if not--

Unidentified Justice: Like with the bargaining agreement itself, nevertheless we regard it as part of it if it's part of the relationship in the past between the parties?

Mr. Morikawa: --Yes, your Honor.

The whole point is that not all agreements are specifically written down in form.

But, in fact, many of the agreements exist by practice and custom between the parties based upon the past practice.

And that's precisely the kind of agreements that we're talking about here.

The past practice being the right of Conrail to set these medical fitness for duty standards.

The question then was whether the addition of the drug test changed that agreement, or was it arguably, at least, related to that agreement in a way that it would allow an arbitrator to ultimately determine who was right and wrong.

And we find that in this case, your Honor, the Court proceeded to take that additional step to determine who was right and who was wrong and the consequences of that action.

And I think in doing that it usurped the function that arbitration plays in this process.

I'd like to close at this point and reserve my remaining time.

Unidentified Justice: If I may just ask you one more question.

The Government's brief at page 9 says that if the Adjustment Board concludes that a dispute is a major one, it will issue an order to that effect and will remit the parties to negotiation and mediation under the statute.

Do you agree with that?

Mr. Morikawa: We disagree with that, your Honor.

We contend that the issue for the Adjustment Board is solely to decide whether or not the practice as a whole in the context of agreements may well have been justified as--

Unidentified Justice: So you disagree that an adjustment Board can ever say this is a major dispute, we have no jurisdiction, we remit you to mediation?

That's wrong as a matter of law?

Mr. Morikawa: --The Adjustment Boards do not make determinations, your Honor, with respect to the violations of the Act per se.

We believe that that jurisdiction is in the courts, to determine per se the question of a violation.

Unidentified Justice: So, an Adjustment Board must adjudicate any dispute that's submitted to it by a court even if it considers it to be major?

Mr. Morikawa: No.

The Adjustment Board, your Honor, in that situation would resolve the dispute in the context of the claims that exist between those parties.

Unidentified Justice: Well, how can it do that if it's a major dispute?

Mr. Morikawa: It would not determine a major dispute because a major dispute would be something that would be subject to bargaining.

Unidentified Justice: Let's assume that it finds that it's a major dispute after it has been remitted to it.

Mr. Morikawa: If it finds that it's a major dispute in that situation, in that hypothetical, then the parties would be relegated to... to--

Unidentified Justice: Well, then the Government's brief is correct.

Mr. Morikawa: --It's... It's correct to the extent as follows.

If the Adjustment Board finds that you have a major dispute in a case, the parties would then be relegated to deciding whether or not they want to bargain over it.

Unidentified Justice: By order of the Board.

Mr. Morikawa: It would not necessarily mean they would have to bargain.

It's really a question of choice on the part of the union or the carrier in this case.

If something is a major dispute, it doesn't necessarily mean that the parties must go out and then begin bargaining.

Bargaining begins by the initiation of a process in Section 6, which is a service of a notice initiating the process of bargaining.

In addition to that, the question of the particulars of a bargain that they may want to talk about may be the subject of a different version, completely different, from what the Adjustment Board may have characterized the dispute below.

So that in that sense the Adjustment Board's decision is not dispositive with respect to what is to be bargained in the future.

It's simply a determination of whether or not the parties dispute in this case was justified by the practice or was a new practice that was not contemplated by the original.

Chief Justice William H. Rehnquist: Thank you, Mr. Morikawa.

We'll hear now from you, Mr. Clarke.

ORAL ARGUMENT OF JOHN O'B. CLARKE, JR. ON BEHALF OF RESPONDENTS

Mr. Clarke: Mr. Chief Justice, may it please the Court:

This case, although it arises in a sense out of a drug testing problem, is not really a drug testing case.

That's just the facts in it.

The real issue in this case is the jurisdiction of the federal courts to enforce the specific commands of the Railway Labor Act.

Now, going to those specific commands and what are involved here, we submit the first and most crucial command that's involved is Section 2 First of the Act, that the carriers exert every reasonable effort to make and maintain agreements and to settle all disputes.

Unidentified Justice: Where do we find that?

In the--

Mr. Clarke: 2 First, your Honor, is at page 131 of the Joint Appendix.

The crucial phrase in that is to exert every reasonable effort.

The second issue, or the second statutory provision that's involved, is Section 2 Seventh of the Acts which was added in the 1934 Act.

2 First was a part of the original 1926 Act, and it has remained unchanged since that Act was enacted.

2 Seventh was added in 1934 and it was added, according to its legislative history, to emphasize the intent of Two First and 6 that no change shall be made in rates of pay, rules, or working conditions as embodied in an agreements, except in the manner prescribed in the agreement or in the manner prescribed in Section 6.

That was, according to the legislative history... which you can go back to the Bankruptcy Act of '33 and the Emergency Transportation Act of '33, where this provision came from... the intent of that provision was to stop practices that had been going on where the carriers had been by bulletin suddenly changing the actual working conditions of the employees, claiming that they weren't in violation of the agreement, but just making the change.

Unidentified Justice: --So, one of the critical question is, is this a change or not?

Mr. Clarke: That is correct, your Honor.

The next statutory provision that's involved in this case is 3 First (1) of the statute.

3 First (1) is located at page 142.

And what... excuse me?

Unidentified Justice: Where do we find that?

Mr. Clarke: On page 142... (1)... you go back into the indentation again.

It's right at the very bottom.

And in the middle of that paragraph what it basically... well, up in the early part... what it says is that disputes between an employee or group of employees and the carrier growing out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, and working conditions are to be handled on the property up to the usual manner.

And then, if still unresolved, may be referred by either party to an Adjustment Board.

Now, a crucial factor of this particular section is that this is very unique, for this reason.

In the Railway Labor Act both the employer and the employees can refer a dispute over the interpretation or application of an agreement to the dispute resolution grievance procedure, the Adjustment Board process, the arbitration found... that you have under the NLRA.

And the NLRA, it's normally... sometimes limited to just the employees.

But in the Railway Labor Act, from the very beginning... and this was a provision that started in 1926 and actually predates that, as we explained it in our brief... it goes back to the railroad's control by the Federal Government in 1918.

Both parties to the dispute, if they are unsatisfied with the results on the property can have an outside force take a look at it and determine what the real meaning of the contract is.

Now, the next provision that's involved in this case--

Unidentified Justice: Before you leave that, does that refer to minor and major disputes?

Mr. Clarke: --Your Honor, this is the tricky question in this whole case, what is major and minor.

Unidentified Justice: But--

Mr. Clarke: That is--

Unidentified Justice: --In your view, does the language that we've just examined refer both to major and minor disputes?

Mr. Clarke: --Your Honor, it refers simply to the jurisdiction of the Board to determine... Adjustment Board to determine the interpretation of a contract.

That is typically a--

Unidentified Justice: So then in--

Mr. Clarke: --minor dispute.

Unidentified Justice: --So then in that view the Adjustment Board could determine the dispute, whether or not it was major or minor?

Mr. Clarke: The Adjustment Board's sole role, your Honor, is to determine what the contract means.

It doesn't determine whether a dispute is major or minor.

Unidentified Justice: Mr. Clarke, now you've really confused me.

You... You say if it comes within (i), it is typically a minor dispute?

Mr. Clarke: Yes, your Honor.

Unidentified Justice: I thought that minor dispute was shorthand for its coming within (i).

That it had no other meaning except that.

Mr. Clarke: That's the problem that's arisen.

That was not the intent of the statute but--

Unidentified Justice: Well, the statute doesn't even use minor dispute or major dispute.

Mr. Clarke: --That's correct, your Honor.

But those terms were used, and they were common terms in the industry in the 1920s and in 1934 when the Act was amended.

Unidentified Justice: Well, but that's how the courts have been using them, certainly, as synonymous with what comes within (i).

Mr. Clarke: That's correct, your Honor.

But what point--

Unidentified Justice: If all you mean to say is that what's a minor dispute may be a big deal, that's fine with me.

Mr. Clarke: --No, your Honor, I'm not saying--

Unidentified Justice: I understand that.

Mr. Clarke: --The colloquial use of the terms back in the time the Act was amended in '34 when the Adjustment Board process was set up and it was given exclusive jurisdiction over interpretation of contracts was that that would deal with what were known in the industries as minor disputes.

What has happened since 1934 is the courts have said if you have an interpretation issue involved in a dispute, it's a minor dispute.

Unidentified Justice: Exclusively?

Mr. Clarke: Exclusively.

And that's the problem.

Unidentified Justice: Only because it's a difficulty or dispute over the meaning of the contract or a provision of the contract.

Mr. Clarke: That is correct, your Honor.

Unidentified Justice: And if it's a dispute that does not involve the interpretation or the meaning of the contract, then is it a major dispute?

Mr. Clarke: If it involves... a major dispute involves a change.

And the point that we're trying to emphasize here, your honor,--

Unidentified Justice: Right.

Mr. Clarke: --Is that a change can carry with it a dispute over the interpretation of a contract.

Unidentified Justice: Of course.

But it seems to me that all the courts have done is to... is to give the benefit of the doubt to the... to the least severe mechanism.

What... What we're arguing about here is whether this particular change is a change in the rates of pay, rules, or working conditions as embodied in the agreement under Part 7.

Mr. Clarke: That's correct, your Honor.

Unidentified Justice: Or, rather, whether it's a change arising out of the interpretation or application of the agreement.

Mr. Clarke: Your Honor, not a change.

Unidentified Justice: And it seems to me what the courts have said is that if there is any doubt it, if it's arguable, we'll consider that what we're arguing about is the interpretation of the agreement rather than a change in the agreement.

Mr. Clarke: That's correct, your Honor.

But one--

Unidentified Justice: Well, why isn't that reasonable?

Mr. Clarke: --The one dispute I have of what you said is that if it's a change arising out of the interpretation or application of an agreement it's a minor dispute... that's not what the statute says.

The difference is this: If it's a change, unless it is authorized by the agreement, it is prohibited by the statute.

Unidentified Justice: Sure.

Of course.

Mr. Clarke: Now--

Unidentified Justice: It's not a change, however, if the agreement is interpreted one way.

And it is a change if it's interpreted another way.

Mr. Clarke: --Your Honor, that gets into the question of when you have a dispute over whether you have a change.

That is not what we're dealing with here.

In this case there is without a doubt a change.

Now,--

Unidentified Justice: Everyone agrees to that, Mr. Clarke?

Mr. Clarke: --Your Honor, the record is a--

Unidentified Justice: No, I--

Mr. Clarke: --a finding of fact.

Unidentified Justice: --Does the other side agree with you that what's involved here is a change?

Mr. Clarke: Your Honor, I don't think they agree, but the records... the finding of fact below, which is unassailable here, is that it is a change.

So,--

Unidentified Justice: Would you agree with... do you agree with the arguable standard or not?

Mr. Clarke: --Your Honor, the arguable standard is a good test of the court's jurisdiction where you have a question as to whether there is a change.

Unidentified Justice: Uh-huh.

Mr. Clarke: But once you--

Unidentified Justice: Well, what if it's just... what if the question is, well, if you interpret the contract one way, this is a change; if you Interpret it another way, it's not a change?

And it's arguable that the contract would... there is an arguable interpretation of that contract which would indicate this is not a change?

Mr. Clarke: --That... That's contrary to the intent of the drafters of the Act as to what they meant by change.

They--

Unidentified Justice: So, you say... you say if it's arguable, the courts have to decide it in the first instance?

Mr. Clarke: --No, your Honor.

What--

Unidentified Justice: What do you say?

Mr. Clarke: --What I'm saying is that if there is a change, what the courts have to do is to enforce the status quo obligation that the Act carries with it.

Unidentified Justice: Well, can they do that until they determine that there has been a change?

Mr. Clarke: Your Honor, there is... the Act--

Unidentified Justice: Don't they have to determine that what's involved is a change before they can do anything?

Mr. Clarke: --Yes, your Honor, But the point that I'm getting at on change is the change that the statute used is the literal broad meaning of the word change and not the meaning of the word change in that it's something that is authorized by a contract.

And that's... you take a look at 2 Seventh and it brings it out in this sense.

If 2 Seventh means that if you have a dispute over whether or not there is a change in what's going on, and whether that change is authorized, the dispute is basically this.

I say I'm authorized by the agreement to do it so, therefore, I'm not changing it.

You say I'm not authorized by the agreement so, therefore, it's a change.

We have a dispute as to whether there is a change.

If that's what 2 Seventh means, then the language, except in the manner prescribed in the agreement, means nothing.

Unidentified Justice: But what about the word arguable?

Where did the word arguable come into RLA jurisprudence?

It's not in the statute.

Mr. Clarke: It's not, your Honor.

The--

Unidentified Justice: Did it come from Elgin, Jollet & Eastern?

Mr. Clarke: --No, your Honor, it didn't come from that.

It came basically in the... it first started to prop up as plausible and then arguable in the '60s.

Unidentified Justice: Where did it prop up?

Mr. Clarke: It comes basically from--

Unidentified Justice: Or crop up?

Mr. Clarke: --the NLRA concept of clear and patent breach.

Unidentified Justice: Well, but the courts... courts construing the RLA have used the term, have they not?

Mr. Clarke: Yes, your Honor.

Unidentified Justice: Has this term... Court used it?

Mr. Clarke: This Court has never used that term.

Unidentified Justice: The term arguable?

Mr. Clarke: Arguable.

It has never... this Court has never addressed the issue except tangentially in the Chicago and Northwestern case as to a classification of a dispute as major or minor.

In Chicago and Northwestern there was a moratorium clause specifically prohibiting a bargaining Section 6 notice.

The carrier claimed that the bargaining notice was prohibited by the moratorium clause, which said that no notice on that subject would be served for this period of time.

And then they argued that since the question of whether our interpretation of the moratorium clause is correct, there is no obligation to bargain over the notice.

This Court rejected that by saying only one word need be said about that.

It's... It's impossible to talk about a proposal to change an agreement as not being what was covered by Section 6.

Unidentified Justice: Mr. Clarke--

--Mr. Clarke, back up a minute.

What exactly was the change here?

Mr. Clarke: Yes, your Honor.

The change in this case was... there are two sets of rules that apply.

The medical fitness standards which the courts below found are in fact an implied agreement.

So we're... this is an agreement case.

Secondly, as Rule G, one the manner in which Rule G has been enforced, the implied agreement that the record shows exist is that Rule G is enforced solely by sensory observations of the supervisors and by particularized cause.

That goes into the question of the doctor and the doctor's taking of the test.

The difference between the two... and this is where the change comes in... is this.

Under medical fitness when someone is disqualified for medical fitness purposes, they are held out of service until the medical fitness problem dissipates or is cured or is somehow corrected.

Under Rule G, if you are found guilty of violating Rule G which simply prohibits the use of drugs or hallucinogens, alcohol or hallucinogens, while on duty or while subject to call, you are subject to discipline, which includes being fired.

Medical fitness never had discipline involved in it.

Under this standard, we now have 45 days to test negative or you're discharged.

No other medical fitness problem is treated in that way.

Unidentified Justice: Now, is it true that for another disease that requires some kind of medical consultation or treatment that if the employee were ordered to take certain treatment to cure the disease and the employee refused to cooperate and do that, that no disciplinary action could be taken?

Mr. Clarke: Your Honor, there is nothing--

Unidentified Justice: The employee fails to show up for the medical appointments or fails to do what the doctor instructs, can no discipline be enforced?

Mr. Clarke: --Your Honor, there is nothing in the record on that.

We would submit that discipline cannot be enforced by that.

You can't rule--

Unidentified Justice: Well, the other side takes the other view and says,

"We've always disciplined employees who fall to cooperate. "

Mr. Clarke: --They discipline employees who fall to show up for... to take an exam, to come in for a routine physical or some kind of scheduled exam.

That's accepted practice.

Unidentified Justice: Uh-huh.

Mr. Clarke: And they fall to come in... they are then disciplined for not complying with carrier instruction.

Unidentified Justice: And suppose that it's a completely curable medical condition if they take the medication that's prescribed or do the exercises that they're told to do and they just refuse to do it?

They can't be disciplined?

Mr. Clarke: Your Honor, we submit no.

They can't be returned to duty until they comply with the instructions.

There is a set procedure of another... outside doctor's opinion, and then an arbitration if you have a dispute over whether the standards and stuff are proper.

But the point is, we submit the person cannot be disciplined in that type of situation because what is happening is that the medical standard is that you're taken out of service until you're cured.

What is going on is a question of whether or not there is any insubordination.

Unidentified Justice: You said there are set procedures for having you taken out of service until you're cured.

Are those in the contract or are they outside the contract?

Mr. Clarke: They're mainly in the contracts, your Honor.

There are procedures for outside doctors for getting a second opinion.

And then the... if there is a dispute, there's an arbitration process.

There's--

Unidentified Justice: Well, aren't there a whole set of procedures under the... that the company has adopted for the administration of its own physical examinations that are not in the contract?

Mr. Clarke: --That's correct, your Honor.

Those are the medical fitness policies that the company establishes.

And they have--

Unidentified Justice: May--

Mr. Clarke: --Historically been established by prohibition.

Unidentified Justice: --May I go back to a question that you started to answer and then I don't think you ever answered.

What if you have a dispute over whether there is a change within the meaning of the statute?

Who decides that?

Mr. Clarke: We submit, your Honor, that there is a... that if there is a dispute over a... whether there is a change, the... that dispute, if the carrier's position that what it is doing is not a change is arguable... in other words, that the union's position--

Unidentified Justice: Arguable that it's not a change?

Mr. Clarke: --Arguable--

Unidentified Justice: Who decides that?

Mr. Clarke: --The court makes that threshold determination.

Now, that is what has been the standard in--

Unidentified Justice: The Adjustment Board can't make that determination?

Mr. Clarke: --Your Honor, this is the problem that we have.

The fact that something is labeled as a major dispute doesn't eliminate the jurisdiction of the Adjustment Board to resolve the contract interpretation issue.

Even a frivolous claim, the unions have the right to present to an Adjustment Board.

So, an Adjustment Board can make the determination that there is or is not a change.

What is done in the court is not in any way affecting the Adjustment Board's jurisdiction.

Now--

Unidentified Justice: You support the use of the word arguable then, don't you?

Mr. Clarke: --I do for a limited type of test, your Honor.

Essentially what the union submits is that you have to look at 2 Seventh for the standard on the court's jurisdiction.

The courts clearly have the jurisdiction to enforce 2 First.

They clearly have the jurisdiction to enforce 2 Seventh.

Now, 2 Seventh said no change shall be made if there is a dispute over whether or not change is used in the statute.

And the legislative history makes it clear that whether or not a carrier claims a right under a contract to make the change is not the issue as to whether there is a change.

The change that--

Unidentified Justice: That is not what 2 Seventh says.

It does not say all changes.

It says all changes in working conditions as embodied in agreements.

Mr. Clarke: --That's right.

Unidentified Justice: Suppose a railroad decides that it's going to open its locker room 15 minutes later than it used to, that's a change.

Mr. Clarke: That's right.

Unidentified Justice: Do you have to go through the massive--

Mr. Clarke: No, your Honor.

Unidentified Justice: --negotiations procedures--

Mr. Clarke: No.

Unidentified Justice: --for that?

Why not?

Because the agreement didn't say anything about that particular subject and, therefore, it's a change in the working conditions but not a change in working conditions as embodied in the agreement.

So, what's always at issue under 2 Seventh is whether it's a change in what had been agreed to.

Mr. Clarke: Not--

Unidentified Justice: So you have to get to the issue of whether it's arguable that this was agreed to or not.

Not just whether it's arguable that this is a change.

Mr. Clarke: --Your Honor, it's not whether there's a change in what was agreed to.

It's whether there is a change that is affecting what is... what was agreed to.

That's what the legislative history makes clear.

Unidentified Justice: Well, I'm reading the statute.

It says working conditions as embodied in agreements.

Mr. Clarke: Yes, your Honor.

That was added in 1934 at the request of the railroads because they indicated that working conditions... the conditions of employment are specifically established by agreement.

Now, the point--

Unidentified Justice: In which case is, is this a change in something that's been agreed to.

And if it arguably is a change in something that's agreed to, it's major... minor if it is clear that nothing that's been agreed to is being changed here, you don't have to go through a major renegotiation of the contract.

Mr. Clarke: --Your Honor, there are two aspects that are being confused into one.

There is the question of notice.

What triggers the obligation of notice.

And the second question is what is the status quo obligation... that is in place... comes into place once the notice obligation is triggered.

What the legislative history shows is that language means... and this was added basically at the request of labor... that if the carrier is making a change that affects rates of pay, rules, or working conditions that are embodied in an agreement.

The clearest example are the line sales... even though it might not be prohibited by an agreement, a violation of the agreement, if what they are doing changes the working conditions.

And the prime example of that is the use of the legislative history of 1924 where Mr. Richberg explained the intent of this language.

And that was that where they... the contracts at that time had the expiration clauses that provided that they died at the end of a year unless 30 days prior to that time notice of change had been given.

And the purpose of the statute that they were proposing back in 1924, which was enacted as 2 First and 2 Sixth, was that even though the contract language said this is... you can change, you might make all your changes, they couldn't do it if what was being done would affect the rates of pay, rules and working conditions while that bargaining process was going on.

Unidentified Justice: Why isn't my locker room example covered by your theory?

Why don't you have to go through a major renegotiation for that?

Mr. Clarke: Because, your Honor, whether or not you report 15 minutes or a half hour later is not affecting the working conditions that are embodied in the agreement.

But where you change the--

Unidentified Justice: It affects working conditions, doesn't it?

Mr. Clarke: --But not as embodied in an agreement.

And for that reason it is not one that requires notice.

But, assume that you get--

Unidentified Justice: That's... that's my point.

Mr. Clarke: --Right.

Unidentified Justice: When you put the stress in, as embodied in an agreement, it seems to me that's the other side's case.

Mr. Clarke: It is not, your Honor, for this reason.

If you interpret something as being... if there's a question as to whether there is a change in the literal use of that word that the Congress used, then you do have a question... we have to interpret the agreement first to determine if there's a change.

But where you clearly have a change and the carrier comes back and says,

"But it is authorized by the agreement. "

And that's the point we're getting to here.

They recognize that there is a new policy that was implemented.

It's clear that it's different than what they did before.

But they are coming in and saying,

"We have the right under our agreement with you to make this change. "

So, the difference between this case and the other case, the arguable standard which is the reverse of the NLRA's clear and patent breach of contract standard, or breach... is basically this.

Where you have a dispute as to whether the contract is being changed by what they're doing, the Adjustment Board has the ability in enforcing the contract to give complete relief to both sides.

But where the dispute is whether the change is authorized by the agreement... not whether the agreement is being interpreted properly... if the dispute is whether the change is authorized by the agreement, the only thing the Adjustment Board can say is that no, it's not, or yes, it is.

If the Adjustment Board says it is not, then what you have has been a change in working conditions that's not in the manner prescribed by Section 6, not in the manner prescribed in the agreement.

And that is a major dispute.

But, in the meantime, by the standards that the courts have been applying recently, adopting the arguable standard to this defense, defensive use of an agreement, is that the status quo obligation has been changed.

And the point that I'm trying to get to in all of this--

Unidentified Justice: You... You don't support the reasoning of the Third Circuit then, although it ruled in your favor?

Mr. Clarke: --We do, your Honor, in the sense... to this degree.

In this case it's not even arguable that there was in fact an authorization to make this change.

But the reason why we're presenting this standard, this view of Section 2 First and Sixth is that the courts have combined the status quo concept with the minor dispute concept and they've twisted things around.

The lower courts have twisted around.

And when you look at a dispute as being all major or all minor and never the twain shall meet, what you come up with is you adulterate the Act.

The Act was intended, from the very initial enactment in 1926, to put a status quo obligation on all disputes.

No change shall be made until the Act's processes have been completed is what the intent of the Act was.

In the initial 1926 Act minor disputes were also considered by the Congress.

The only difference was that minor disputes initially went to an Adjustment Board that could be set up by voluntary agreement.

And if that Adjustment Board was able to resolve it, well, that ended the problem.

But if the Adjustment Board didn't resolve it, it went immediately back... if any party requested... to the mediation process.

And from the mediation process to the Emergency Board process.

And during that entire processing no party shall make any change in the conditions out of which the dispute arose.

Unidentified Justice: Mr. Clarke, can I ask you a question?

Mr. Clarke: Yes, sir.

Unidentified Justice: Would it be consistent with what you've just said all the way through for the railroad to say after you filed your lawsuit, well, we didn't think there was any change here, we think we were just making a... pursuing a past practice that is implicitly authorized by the collective bargaining agreement?

But a dispute new seems to have arisen and therefore, pursuant to subparagraph (i), we will file some kind of a proceeding before the Adjustment Board and say, please tell us whether we are right or wrong about our reading of the agreement.

Mr. Clarke: That is correct, your Honor, and that's the point that we are trying to make here.

Unidentified Justice: And had they done that, and had the Adjustment Board said, yes, this is authorized by the agreement, then your lawsuit would be gone.

Mr. Clarke: Well, that's correct, your Honor, because there it isn't being in a manner authorized by the agreement.

But until that--

Unidentified Justice: And also, you could have done that too, couldn't you?

Mr. Clarke: --Your Honor, the unions could also protest, but the unions' position is that there is no way you could say that the unions by agreeing to allow the carrier to set medical fitness standards has ever agreed to allow the merger of medical fitness and drug testing.

They are two separate standards.

In one you're not fired; the other one you are fired.

Unidentified Justice: What you're saying is it is so clear that there is no change in the terms of the agreement that it's not even arguable--

Mr. Clarke: That's correct, your Honor.

Unidentified Justice: --and, therefore, no basis... there is no way in the world the arbitrator could have--

Mr. Clarke: That is correct, except for one problem.

We are now to this Court, for the first time, addressing the interplay between major and minor disputes.

And the point that we have to emphasize to this Court is that if the lower courts... and I don't just mean the Third Circuit, but all of the courts... standard is applied--

Unidentified Justice: --There have been about five of them, have there not?

Mr. Clarke: --Well, your Honor, it's basically all of the... except possibly the Tenth Circuit... have adopted the arguable standard.

And we have no objection to the arguable standard where the Adjustment Board can give complete relief, it can resolve the entire dispute.

But where the Adjustment Board is one step in the resolution of the dispute, where if the Adjustment Board concludes that there is no contract authorization for what is going on... not that it violates the agreement, it changed the working conditions because you're taking away the man's seniority, but it doesn't violate it... then what you have is the Adjustment Board can say to the employees,

"Sorry, folks, we can't give you any relief because you haven't gotten the contract which prohibits what they're doing. "

The only thing that prohibits what they're doing is the statute, and the statute's status quo period.

So, what that means, when the Adjustment Board rules a couple of years down the pike, is that in the meantime all of this was being done in violation of the statute.

Now, Pitney, when this Court addressed the concept of minor dispute and the Court's jurisdiction, the Court said that where there is a clear violation of the statute the court should not withhold its hand.

But where there is a question as to whether there is a violation of the statute the court in the exercise of its equity discretion should withhold its hand and let the Adjustment Board resolve the case.

Unidentified Justice: What happens, again, with my locker room example where they just want to open the locker room 15 minutes later?

Mr. Clarke: Your Honor,--

Unidentified Justice: That's a change.

Okay?

Mr. Clarke: --It's not a change--

Unidentified Justice: It's a change within the scope of changes that I think the agreement allows the employer to implement.

Right?

Mr. Clarke: --Your Honor,--

Unidentified Justice: No?

Mr. Clarke: --whether it's in the scope doesn't matter.

It's not a change unless you have an agreement dealing with the starting time and the location.

A change of 15 minutes in when you can go in or out is not the type of change that requires a notice.

This is the point I'm getting... there is a difference between the notice obligation under 2 Seventh and the status quo--

Unidentified Justice: Is there anything written in this agreement about... about medical... medical inspections?

Mr. Clarke: --There is nothing written in the agreement--

Unidentified Justice: It's just a practice, right?

Mr. Clarke: --No.

Unidentified Justice: And that's why--

Mr. Clarke: No, it is not--

Unidentified Justice: --you say it's not--

Mr. Clarke: --your Honor.

Unidentified Justice: --No?

Mr. Clarke: That's why this is a different case than a practice case.

If this was a practice, there would have to be something that would trigger the bargaining process, and that would have to be a change in agreements, in the working relations that are embodied in the agreement.

In this case the record below, according to the courts, provides that there is in fact an implied in fact agreement dealing with Rule G, its enforcement, medical fitness.

So we are now dealing--

Chief Justice William H. Rehnquist: Your time has expired, Mr. Clarke.

Mr. Clarke: --I'm sorry.

Chief Justice William H. Rehnquist: The case is submitted.

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Argument of Francis M. Shea

Chief Justice Warren E. Burger: Shore Line against United Transportation Union.

Mr. Shea, you may proceed whenever you're ready.

Mr. Francis M. Shea: Mr. Chief Justice, may it please the Court.

Parties to this case are Detroit and Toledo Shore Line which I shall refer to Shore Line and UTU which is a merger of four operating Unions, I shall refer to it including the Firemen's Union.

I shall to refer to it as the Union of the Firemen's union.

This case arises under the Railway Labor Act.

As Your Honors are well aware, there are two kinds of disputes that arise under that Act.

The so-called minor disputes which involve the interpretation or application of the existing agreements and they follow the course of negotiation and if that fails, compulsory arbitration before an Adjustment Board whose decisions are final and binding on the parties.

And then there's the major dispute involving not the interpretation or application of existing agreements, but the making or changing of existing agreements and these follow a different course.

Section 6 notice proposing a change is served as negotiation, mediation and proffer of arbitration in the discretion of the President's appointment of an Emergency Board and then the parties are free to exercise self-help at the end of that route.

In this case, an Adjustment Board determined that there was nothing in existing agreements which precluded Shore Line from establishing an outlying reporting point, the point at which a fireman might be required to report for work at the end of the day away from the main terminal.

Shore Line proposed to establish such a point.

The Union served a notice proposing that the exclusive reporting point should be at the home terminal at Toledo.

And the court below held that in virtue of the mere filing of that notice to deprive Shore Line of its right under the existing agreement to establish an outlying terminal, that was accomplished and they were deprived of that right.

Now, the facts are briefly these.

Shore Line is a small railroad.

It runs about 50 miles from Toledo to Detroit.

Lang Yard is the mainline.

The yard at Toledo is the yard just south of Detroit called Dearoad and there's one other geographic point I have in mind, that's at Trenton where there's the Edison Yard, that's about 35 miles north of Toledo.

There's a growing and large industrial development at Trenton.

While outlying points have historically been established, for many years, Trenton was served by firemen who reported at the Toledo Yard and took their -- went with their engines up to Trenton, did the switching there, then went back to 35 miles and tied up at Toledo.

In 1961, this growing industrial development in the view of the railroad required that they establish an outlying point at Trenton and they served or they proposed to the Union that they would establish an outlying point at Trenton.

The Union served a Section 6 notice proposing negotiations on terms or conditions under which that outlying assignment should be established.

Negotiations were to had, mediation was had, proffer of arbitration, finally, the matter was released.

But at that time there was no strike and at a subsequent point the Union withdrew that notice and there wasn't the establishment of the reporting point of Trenton.

The alternate year for switching at Montesanto by Shore Line could pass and they said we don't to propose to establish this point at Trenton.

But in the meantime late 1962 and in again September 1963, they established an outlying point just south of Detroit and called it Dearoad and on this occasion the Union pursued the minor dispute route.

It took it to an Adjustment Board and it urged that under existing agreements, and under their existing practices Shore Line was barred from establishing this outlying reporting point at Dearoad.

The Adjustment Board decided against them.

The Adjustment Board said there's nothing in the rule of agreement which precludes the establishment at that point and I think it's not contested that under the existing agreements then Shore Line was privileged to establish that outlying point.

They then proposed again to establish an outlying reporting point at Trenton and the response to that was a Section 6 notice proposing that the only point at which firemen might be required to report would be the Toledo Yard.

Justice Potter Stewart: That is proposing the negotiation of a provision under the collective bargaining contract that would so provide.

Mr. Francis M. Shea: That's right and which would deny Shore Line of the right that they then had to establish the outlying points.

There was a negotiation about this and that didn't get anywhere.

The Union invoked the issue and the mediation was pending at the time of this record was made.

In late September 1966, Shore Line being confronted with the immediate requirement again switching Montesanto with McClould having demanded a series of it, they posted a bulletin establishing an outlying assignment at Trenton for trains to operate in the switching of these industrial establishments at Trenton.

At that point, the Union threatened a strike.

Shore Line sought an injunction against the strike.

The Union counterclaimed for an injunction against the establishment of this outlying point.

The District Court denied the injunction against the strike, granted the injunction against the establishment of the outlying point.

The court below affirmed and the issue is, I suppose, is the correctness of the decision below on certiorari to this Court.

Now, the only provisions of the Railway Labor Act which are actually involved here are Section 2 (7) and Section 6, the so-called status quo provision of Section 6, in fact you've indicated that these two sections have to be read together and may I read them to you.

The first appears on Section 2 (a), page 2 (a) of our brief and that Section 2 (7) which reads as follows: “No carrier, its officers or agents shall change the rates of pay, rules or working conditions of its employees as a class as embodied in agreements except in the manner prescribed in such agreements or in Section 6 of the Act.”

Now, I think there's no contest about the fact that that bars only a change in the existing agreements.

It does not deprive the parties of the rights under the existing agreements.

And Section 6 reads, carriers, that's on 5 (a) of the appendix, “carriers and representative to the employees shall give at least 30 days written notice of an intended change in agreements affecting rates of pay, rules or working conditions with time and place in the beginning of conferences between representatives of parties in such intended change should be agreed upon within ten days after the receipt of said notice.

That time should be within the 30 days provided in every case where such notice of an intended change has been given or conferences are being held with reference thereto of service of the Mediation Board have been requested by either party or said Board has proffered its services, 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 5 of this Act by the Mediation Board” etcetera.

Now, what we say that this provision of Section 6 means read together with Section 2 is what this Court said it meant in Williams against the Terminal Company.

Here's what the Court said, "The institution of negotiations," that is the filing of the Section 6 notice, “the institution of negotiations for collective bargaining does not change the authority of the carrier.”

The prohibitions of Section 6, against change of wages or conditions pending bargaining and those of Section 2 (7) are aimed at preventing changes in conditions previously fixed by collective bargaining agreements.

But we say Section 6 means is again what this Court said it meant in Order of Railroad Conductors against Pitney.

There this Court said, 2 (7) of the Act provides that no carrier its officers or agents shall change the rates of pay, rules, or working conditions of its employees as a class, as embodied in agreements except in the manner prescribed in such agreements under Section 6 of the Act.

Section 6 as we have seen prohibits such change unless notice is first given and its requirements were otherwise complied with.

Section 2 (10) of the Act makes it a misdemeanor punishable by both fine and imprisonment for a carrier willfully that violates Section 6.

These sections, these sections make it clear that the only conduct which would violate Section 6 is a change of those working conditions which are embodied in agreements.

Now, what we think it means is also what the Mediation Board has consistently interpreted as meaning.

Since 1956, the Board repeated, Mediation Board repeatedly in its annual reports, in its instructions to mediate it, in its response to demands of the Unions, repeatedly they have said this, and I read their latest pronouncement, pronouncements earlier were of a kind.

In brief, “the rights of the parties which they had prior serving the notice of intention to change, that's part of the serving the Section 6 notice, the rights of the parties which they had prior to serving the notice of intention to change remained the same during the period the proposal is under consideration and remained so until the proposal is finally acted upon.

The Board has stated in instances of this kind that the serving of a Section 6 notice for a new rule or change, a change in an existing rule does not operate, does not operate as a bar to the carrier actions which were taken under rules currently in effect.”

We also think, if the Court please, that the interpretation which we give Section 6 is the interpretation which was given in the making of the legislative history of that provision.

Section 6, the initial Bill, which ultimately became in the subsequent year the 1926 Act, was called the Howell-Barkley Bill and Mr. Richberg in explaining the provision that became Section 6 from what was apparently a prepared text under the heading “changes of agreements” had this to say.

“An agreement that can be changed without notice is really no agreement at all.

Certainly, the power on the one hand and the fear on the other of arbitrary change will read this Court not harmony.”

There is provided in Section 6 that either party shall give at least 30 days written notice of an intended change and that the time and place of conference shall be agreed upon, thereafter a change and it seems to me clearly refers back to the change proposed, thereafter change is prohibited until machinery for peaceful adjustment has been fully utilized.

Now, if the Court please, very important, I think important practical considerations which are entitled to weight.

If I understand the opposing counsel correctly, he says that these so-called status quo provisions briefly applicable, to indeed asserts, simply applicable to the Union and to the carrier and I put them below when he was not willing to bite the bullet then I doubt he will hear, I put in this situation or these two situations.

One of the most cherished rights of workmen in this field are their seniority rights.

A place opens up, a desirable place, the man who has been there longest can be at the end and the place he opens up than the man with the next greatest seniority can bid that in and so forth.

Now, the railroads will suppose serve a notice saying this is disrupting.

From now on, we want to assign men to the post that they are investigated for.

Now, for the long period, the intentionally long period to exhaust the procedures of the Railroad Labor Act, are the seniority right suspended or to take another situation which is not unusual that this negotiation of an agreement for an increase in wage is 3% next January, another 2% in July, another 3% the following January.

They negotiated that bargain and a couple of months later, the Shore Line, the carrier serves notice saying we're losing money and we want to freeze wages.

The length freeze wages for the lengthy period, a year, two years or more in which the procedures of the Railway Labor Act are being exhausted.

Now, I say that if he agreed it would do that.

I can think of nothing which would more be more disruptive of the stability of labor relations or more frustrating to the possibility of making and maintaining agreements in such a rule.

Now, as I understand, as I understand his -- the main thrust of his argument, it is that while the provisions of Section 5, their status quo provisions of 5 and 10 which are not applicable to here because this is still in mediation and those are only applicable only after the mediation has terminated or after the Emergency Board is appointed.

If I understand the main thrust of his argument, it is that all of these provisions, not all, six, five and ten, must mean the same thing, not two because he concedes two doesn't, isn't to be read with all of them.

Now this Court said that had to be read with six in Pitney.

He says, that that isn't the status quo provision after the major dispute is arisen.

But he says these three have to be read together and he gets some comfort from the language of 5 and 10.

Now, I don't understand what comfort he gets from 10, indeed 5, but 10 says that after Emergency Board has been appointed for 30 days after the reports to the President, no change shall be made in the conditions out of which the dispute arose and I think the conditions out of which this dispute arises is that under existing agreements, we have the right to establish an outline point and they want to take it away from us and they proposed that change and it is that's what shouldn't be changed.

Well, that means that our rights under the existing agreement shouldn't be changed for this period.

Now, 5 provides that after the Mediation Board releases the dispute for 30 days, there shall be no change in rates of pay, rules, working conditions or working conditions or established practices.

There is little to indicate the reason for the introduction of established practices.

We've done a textual analysis which there isn't time for an oral argument, but I think I can point this out that that was introduced in the 34th Amendment and Eastman who drafted the 34th Amendment said that this was merely the plug a loophole which theretofore existed.

Prior to that when mediation was terminated, the railroads would go in immediately and affected their changes even though later an Emergency Board might be established.

And he said the only purpose of this is to hold it long enough to give the President the opportunity to establish an Emergency Board.

Certainly, --

Justice Byron R. White: Mr. Shea, I take it that you would argue that if there were no agreement at all between a carrier and its employees, but they were in the process of negotiating agreements that the employer could, pending the working out of Section -- of these mediation procedures change wages?

Mr. Francis M. Shea: I would because this Courts squarely so held in Williams.

Justice Byron R. White: Yes, and would you say that the Union might waive its strike?

Mr. Francis M. Shea: I would say no because I think that was so held in Williams.

Justice Byron R. White: So, the Union is -- may not strike pending the resolution of the mediation procedures, but the carrier may change wages, hours or working conditions so long as they are not governed by an existing agreement?

Mr. Francis M. Shea: They may exercise -- yes, they may exercise those rights that they then have.

Justice Byron R. White: Well, and apparently you agree that this business of establishing an outlying terminal was subject to Section 6 procedures?

Mr. Francis M. Shea: One subject to Section 6 procedures.

Justice Byron R. White: I mean it was proper for the Union --

Mr. Francis M. Shea: We're not raising here the issue that this was purely a matter of managerial discretion.

Justice Byron R. White: Well, this was the point of the matter because as far as this case is concerned --

Mr. Francis M. Shea: Well, I think it wasn't but --

Justice Byron R. White: Well, I know but --

Mr. Francis M. Shea: So far as the argument here is concerned --

Justice Byron R. White: So far as the issue here is concerned --

Mr. Francis M. Shea: That's right.

Justice Byron R. White: -- this is just as though on wages.

Mr. Francis M. Shea: Yes.

I think that's right.

Justice Byron R. White: In the absence of an agreement?

Mr. Francis M. Shea: Yes, I think that's right.

But remember, if the Court please, that in the railroad industry, there is enhancement for a very long time detailed rules and --

Justice Byron R. White: You mean agreed upon by the (Voice Overlap).

Mr. Francis M. Shea: Yes, but also have this in mind that very often, there will be a controversy and it will be allowed to drop if there were a decision which required that every right the railroad had had to be in that agreement, you'd compromise the possibilities of reaching agreements very largely indeed.

Justice Byron R. White: I take it that (Voice Overlap) -- I take it that you would take this as no difference than if the railroad proposed to build a spur and the Union didn't want the spur built, so they filed a Section 6 notice to keep the railroad from building the spur.

You would say the railroad ought to be and they'll go ahead and build this spur regardless of a notice and the Union says it shouldn't build the spur regardless of the notice.

Mr. Francis M. Shea: If it's entitled to honor existing agreements, I should say, certainly they ought to be permitted to go in and build it.

There's one other point by respondent -- there's one other point which I like just to touch on before concluding and that is this.

Opposing counsel has raised in this Court, he didn't plead it, he didn't raise it in the District Court, he didn't raise it in the Court of Appeals, he raises it for the first time in this Court.

He urges that under our obligation to exert every reasonable effort to make and maintain agreements under the 2 (1) of the Act, we are barred from taking unilateral action as to any matter which is a subject of discussion under -- which is a subject to discussion in the negotiations and he relies on Fibreboard and Katz.

First of all, I would like to observe that if the Court was going to get into this area, I would suppose they would want the considered views of the court below and they haven't those views because the issue wasn't raised in the court below.

Secondly, this Court has warned against importing these provisions of the LMRA into the -- and particularly in a case like this where you have specific provisions from Railway Labor Act dealing with the problem of status quo.

But finally, it seems to me that these two cases are wholly in apposite in any event, I think all this Court held in Fibreboard, if I read it correctly, was that contracting out work in the certain instances of that case, where the contracting out was going to discharge all them and destroy the Union.

Contracting out of that work was a mandatorily bargainable issue that the company had refused to bargain and that the Labor Board didn't abuse its discretion in fashion of the remedy it did and that is no complement to that kind here.

You talked to them for five years about it.

Secondly, and there's nothing irreversible about this action which has been taken here.

Secondly, as to Katz, if I read Katz correctly, what Katz holds is that you can't -- there was a proposal for increase of wages, proposals as to merit increases, proposals as to sick leave, you can't when you're in a process of negotiation, I think go directly to the man and offer them something without giving the Union notice and without discussing it with the Union.

Now, Katz said, however, if understand expressly, from the statement of the question by reference to the Bradley case and the Landis case, said expressly that this is to be distinguished from the case for instance where the Unions demanded a 16-cent raise, the company has offered 10, the Union rejected it and the company then said, we're not going to give it and do give it, that did not involve any validation.

I don't see that you have any, there's anything apposite about that opinion here because there has been a lengthy discussions, we let them know about it and we try to work out the arrangements for bunkhouse etcetera with them.

There's nothing here that can be urged.

There's an undercutting of the Union.

There's a as going behind the bargaining agent to go directly to the men.

If the Court please, that's our submission unless there are questions from the Court.

Chief Justice Warren E. Burger: Thank you, Mr. Shea.

Mr. Lyman.

Argument of Richard R. Lyman

Mr. Richard R. Lyman: Mr. Chief Justice and Honorable Justices.

I represent the respondents in this case who consist of a successor organization to one of the original defendants, the Brotherhood of Locomotive Firemen and Enginemen and two of its officers, President and the General Chairman of their brotherhood.

Originally, when the case was filed and tried below in the District Court, another organization was co-defendant and the suit was brought to enjoin both the firemen and the brotherhood of railroad trainmen from striking.

They had both been in these original 1961 negotiations, but the firemen at the time they decided to take their case to the Special Board of Adjustment have withdrawn their 1961 Section 6 notice.

The trainmen however had not, therefore, the trainmen had a live matured right to strike and the District Court so held and denied the railroad an injunction against a strike by the trainmen.

Now, of course, no strike has in fact taken place since that division or has there has been any threat of one over this dispute because the fact that the railroad was enjoined from doing the thing that the threatened strike was alleged to have been about.

In the District Court, Shore Line raised three contentions in defending their action.

They said, one, this was a minor dispute, not a major dispute; two, it involved a non-bargainable matter in any event and therefore, the brotherhoods did not have or the respondent firemen did not have a valid Section 6 notice pending; and three, they argue the status quo question which is before this Court.

In the Court of Appeals below, they no longer argued the minor dispute question, but relied down in the two arguments, managerial prerogative and the status quo argument and in this Court, they have abandoned and have not placed before the Court the managerial prerogative argument.

The fact is of course, that this operating change in starting assignments at Trenton was objected to by the Union from the point of view of its impact on the employees in the sense of reporting to and from duty.

The District Court did not enjoin the railroad from making any changes in its physical facilities or plant set up that it desired to do and the Court of Appeals makes this very clear that it didn't constrain the District Court as enjoining any such thing which might be in the area of managerial prerogatives.

Now basically Shore Line is contending here that the status quo requirements of the Railway Labor Act designed to protect the public and preserve industrial peace are strictly limited to what the railroad has already bound itself to contractually.

Turning on Mr. Justice White's a little further in an employment at will, they would say during all the course of this major dispute procedures, they were free to change anything and everything.

In this case, it's their contention that part of the area of wages, rules and working conditions is not covered by the agreement and therefore that as to that part of the working condition area not covered by the agreement, they are free to change those, even though bargaining under the Railway Labor Act is proceeding.

Even though at the time this case came before the District Court, the Mediation Board had accepted jurisdiction and the parties were waiting assignment of a mediator, they wanted to have this unilateral change.

That theory can only be supported if we say ultimately that an employment at will or an area of working conditions outside the coverage of the current contract, the phrase working conditions is used in the statute and which Congress required the (Inaudible) to preserve during this procedure only means such things as are contractually covered.

In other words, carrier's argument and it is set forth in their briefs is that here the working conditions applicable to this particular dispute merely consisted of the carriers' right to change working conditions as it thought fit.

Now, we submit that that is a very sophistical approach to the count -- to the problem and we contend rather that working conditions are things which are in effect and which are being observed and have been observed from the employees' point of view.

The employee when he goes to work doesn't have an idea of his job as a set of things that management can do or can't do in the abstract, he's interested in where he goes to work and how much he's paid, those sort of things and there is a change certainly from his point view and from any realistic point of view, if all of a sudden, operating changes are made by management whether or not in the exercise of claimed rights under the agreement.

Justice Potter Stewart: Leaving more than claimed rights under the agreement in this particular case, aren't they Mr. Lyman, hadn't that.

As I understand it, there had been a minor dispute as to the meaning and application of the collective bargaining agreement with respect to management's making outlying work assignments.

That had been concluded against your position --

Mr. Richard R. Lyman: Yes, I would like to --

Justice Potter Stewart: It was decided by the -- by an Adjustment Board that under the existing collective bargaining agreement, management had the right to make outlying assignments.

So, this is just some claimed right as was decided by the (Voice Overlap).

Mr. Richard R. Lyman: I think that should be defined somewhat because it may enter into Your Honor's consideration of this matter.

I think there could well be a difference in a situation where something is specifically provided for in an agreement and a situation where something is simply management's right by default for the reason that the agreement doesn't cover the subject matter.

Mr. Shea remarked that the Special Board, boards award conclusively established that management was privileged to do this only in the sense that the Special Board held that there was no prohibition in the agreement against it.

The parties aren't bargaining.

There was no clause in the agreement that said from time to time, management may change the reporting points for these men.

Now, I think that brings me into the argument that Mr. Shea made at the conclusion about seniority and couldn't they go ahead and make the usual bumps, and furloughs and recalls and so forth with the agreement provided for if there was notice pending.

Of course, they could because the agreement specifically called for that and it set it out and that was an established working condition without any question.

But whether there's something in this notice or not -- something in this nether -- netherland of employment at will, managerial prerogatives, then the same consideration is (Inaudible) over to and I think that we can only have meaningful bargaining where management refrains from going at and doing whatever it wants to regardless of the fact that it is currently bargaining about whether it's going to do it.

Now, the contention has been made here that Section 2 (7) and Section 6 of the statute that are involved in this case.

It was further contended in the reply brief that we had conceded at section -- that there were four section, pardon me, four status quo sections in the Railway Labor Act; Section 2 (7), Section 6, Section 5 and Section 10.

Our position, of course, has been very clearly stated in our brief.

We contend Section 2 (7) is not a status quo provision at all.

It is simply a prohibition against changes of agreements unilaterally.

And it says that when there is a written agreement, a carrier and it speaks only in terms of the carrier because they are the ones that apply and administer the agreement and the only ones that have the power to change agreements unilaterally.

It says they can't change it unilaterally, they got to do it by the notice procedure of Section 6.

Now, that notice procedure in Section 6 in the first part of it where they talk about giving notice of changes in agreements in abiding rates of payrolls and working conditions, that is not really a status quo requirement.

It is again simply a statement of the mechanism by which you change agreements.

This notice procedure -- provision for arranging for conference within 10 days after the notice requirement of the conference be held within 30 days after the notice, but it's at the later part of Section 6 that you then get into the true status quo provisions in major disputes handling.

And there it says that while these things are going on, neither party may change rates of rules -- rates of payrolls or working conditions and it doesn't -- in the later part of that paragraph use the any reference to agreements.

Section 5, providing the status quo to be observed after Mediation Board takes over and after it's handled and after it has failed in its efforts.

That does not speak in terms of agreements at all.

In Section 10, the Emergency Board status quo provision say nothing about agreements and to speak in terms that are completely inconsistent with the theory that all this is limited to this thorough coverage of an existing contract.

Now, it's been suggested that perhaps we will have to read Section 2 (7) and Section 6 as meaning something separate and apart from Section 5 and Section 10 and that maybe, maybe we might be right in our interpretation of Sections 5 and 10 but something different in the way of a status quo should be required for Section 6.

This Court very recently in Brotherhood of Railroad Trainmen against Terminal Company, Jacksonville Terminal case that was decided early this year had an introductory description of the major disputes procedures in the Act which we think completely refutes any theory that these should be divided into two stages and that maybe the carrier could do what it wanted to do for a while, but then was it going to have to pull it hard and go back to the original status quo if we get into Section 5 and Section 10.

In that decision in the Terminal Company case, and I must apologize for not having the official paging but it's 22 Lawyers' Edition, page 354 in the Lawyer's Edition paging.

The Court concluded its description of those major disputes handling with this language.

“While the dispute is working its way through these stages, neither party may unilaterally alter the status quo, citing Sections 2 (7), 5 (1), 6 and 10.”

The Court clearly does not on the basis of their opinion contemplate any division in what is meant by a status quo.

It's a uniform sort of thing.

Justice John M. Harlan: What weight should be given to the Board's interpretation?

Mr. Richard R. Lyman: I think the legislative history which we've been criticized for our references on the basis that they refer only to Sections 5 and 10, but as I say, I think we must consider this whole status quo together and in view of that legislative history, the Mediation Board's interpretation is clearly unattainable.

I don't think that you have to accord controlling effect to the interpretations of administrative tribunal if those interpretations are preferably in conflict with the statutory scheme and language and in conflict with the very clear legislative history that we find in the Railway Labor Act of 1926.

We have referred to that legislative history in our brief commencing at page 12 and that language is just completely irreconcilable with any thought that status quo means just the terms of a contract that's currently existing.

At page -- at the bottom of page 12, top of page 13, I'm reading from Mr. Richberg's comments before the House Committee on Interstate and Foreign Commerce, he said, the thought was to include in the broadest way all the factors which contributed to what is commonly called the status quo.

The purposes that can preserve, unchanged all the conditions involved in the controversy until there's full opportunity for presidential investigation within 30-day report.

He further said and we quote this at the bottom of page 13, “it was the desire of those who attempted to work out an agreement on this to have a phrase here which would be broad enough so that in the ordinary interpretation of language in its natural meaning, it would be well understood what was intended.”

And then this is quite pertinent to our case too I believe, he goes on following the statement that I just read, with these comments.

“It was not the desire of either parties right in the Section of the Bill something that had not been written in anywhere else and that was an absolute prohibition and a compulsion against one party alone of the Bill.”

A question was raised as to strikes, this is not a one sided affair and then he went on to point out that the intent of management and labor which had concurred of course and agreed upon the draft to the 1926 Act which was presented to Congress currently.

Their purpose was to have status quo that applied to both parties not just one and of course, they couldn't have worked out any agreement among themselves.

What the Shore Line contends here is true in that what the Unions were giving up was the -- their most cherished right to strike and in exchange only got from the carrier a commitment that well it would do what it contracted to do and nothing else.

Justice Byron R. White: What do you think that committee reports (Inaudible)

Mr. Richard R. Lyman: I have been unable find anything helpful in the committee reports.

I think that --

Justice Byron R. White: These statements are different again upon the (Inaudible)

Mr. Richard R. Lyman: Yes, the hearings of witnesses.

Justice Byron R. White: Are you speaking to the (Inaudible) Richberg?

Mr. Richard R. Lyman: Mr. Richberg spoke for the labor unions and Mr. Thom spoke for the carriers.

Mr. Richberg put in practically all of the testimony on the status quo provision.

Mr. Thom --

Justice Byron R. White: Were they both testifying under the same bill?

Mr. Richard R. Lyman: Yes.

This was a bill that jointly --

Justice Byron R. White: Jointly drafted.

Mr. Richard R. Lyman: Was jointly drafted by railroad management and railroad labor.

Mr. Thom was designated as the representative before Congress of the railroad industry and Mr. Richberg was the representative of the Unions.

In other words, they were co-sponsors of the Bill.

Justice Byron R. White: Did Mr. Thom disagree with anything Mr. Richberg said?

Mr. Richard R. Lyman: No sir, he did not.

In fact, it was made clear to Congress by both Mr. Thom and Mr. Richberg that the joint support of this Bill was contingent upon the Congress accepting it as presented to Congress.

Neither side wanted Congress to change one sentence in the Bill and in fact, they said that this had been bargained long and hard and that each side had given up things in order to reach an agreement on a Bill.

The compulsion behind this joint effort I suppose was the fact that both management and labor were interested in preserving their right to bargain on a voluntary basis and the primary concern was to convince Congress that they did not need to have compulsory arbitration that they did not need to have Interstate Commerce Commission review of wages and that sort of thing and that -- and in order to convince Congress of that, they felt that they had to draft very strong status quo measures for the protection of the public against railroad strikes because that ultimately was Congress' primary interest in the Railway Labor Act in avoiding interruptions to commerce.

Justice Byron R. White: And why is there a difference between the Section 2 (7) and Section 6 as far status quo is concerned?

Mr. Richard R. Lyman: Section 2 (7) is not a status quo section.

Section 2 (7) accords, you might say, legal effect to collective bargaining agreements and in fact, it goes beyond that.

It imposes a criminal sanction under the Railway Labor Act of violation of Section 2 (7) is made a crime punishable under prosecution made by a United States Attorney.

Incidentally, it's not true although the Court in Pitney made this observation.

It's not true that a violation of Section 6 is a crime, but perhaps that I assume that observation was made because Courts have commonly attended to take the first half of Section 6 and treated as an extension of Section 2 (7) on this serving of notice.

So, that in many instances, you will find a Court talking about to 2 (6) when it's -- I mean, Section 6 when it's really 2 (7) that is involved and it is 2 (7) and 2 (7) only that was involved in Pitney.

There was no Section 6 notice extended in Pitney, but rather, the Union was trying to enjoin the trustees of the railroad from changing things without resorting to Section 6 under a notice procedure.

I think that the Williams case can hardly be considered determinative here both in its facts and the considerations before the Court.

Primarily, it involved the question of the railroad's obligations under the Fair Labor Standards Act.

I don't see in analyzing the facts where the railroad made any change in working conditions or wages.

The home porters received the same pay or more after the Act when went into effect as they had previously.

Before they just get their tips then the railroad realized that it have to comply with the Fair Labor Standards Act.

So, they said, well, if your tips don't make it up, then we'll give you enough above your tips to meet our obligation.

So, from the employee's point of view, there was no defect or change in their working conditions at all.

Counsel for petitioner has written to the Court advising that they were an error in the contention in the statement that the organization relied on Section 6.

Before I close, I would very much like to direct --

Justice Byron R. White: But there's a pretty square statement in Williams about the way the Court read Section 6?

Mr. Richard R. Lyman: There again, it may be that the Court had this sort of overlapping between Section 6 and 2 (7) in mind and not that -- the Terminal Company did not have to serve the Unions with the Section 6 notice in order to make this change in the arrangement for bookkeeping and the wages.

In any event, some two years after this change was made, the parties signed a collective bargaining agreement which did not even include the subject of wages.

Parties were clearly content to treat this not as a bargaining matter, but as an argument about what the Fair Labor Standards Act required and of course, in any event, that's not something that the parties could control by their bargaining statute of the United States, of course, takes proceedings over what's in the bargaining agreement.

Just last week Your Honors, the decision by the Court of Appeals for the Fifth Circuit came to my attention.

It was decided September 23, National Airlines against Machinists unofficially reported at 72 Labor Relations Reference Manual 2294 which I would like to direct the Court's attention to without commenting on it except for this comment, leading in hands to another case citation.

On two or three different occasions in the course of its opinion, the Fifth Circuit cited with approval the opinion of Mr. Justice Marshall then sitting on the Court of Appeals for the Second Circuit in the case of Rutland Railway Corporation against Brotherhood of Locomotive Engineers which is cited in all of the briefs here.

I particularly would like to direct the Court's attention to that dissenting opinion as rather complete statement in exposition of the position that we take in this case.

Chief Justice Warren E. Burger: Thank you, Mr. Lyman.

Mr. Shea, you have just one minute left.

Rebuttal of Francis M. Shea

Mr. Francis M. Shea: Unless the Court has questions --

Chief Justice Warren E. Burger: I think not.

The case is submitted.

Mr. Shea and Mr. Lyman, thank you for your submissions.

Featured:

NLRB v. Strong - Oral Argument

Thu, 23 Aug 2012 18:16:16 +0000

Case:

NLRB v. Strong

Media File:

61_19681210-argument.mp3

Related Transcript:

61_19681210-argument

Transcript:

Argument of Chif Justice Warren

Mr. Chif Justice Warren: No. 61, National Labor Relations Board vs. Joseph H. Strong.

Mr. Chif Justice Warren: Mr. Weinstein?

Argument of Harris Weinstein

Mr. Harris Weinstein: Mr. Chief Justice, and may it please the Court.

This is a labor case which comes to the Court on a writ of certiorari to the United States Court of Appeals for the Ninth Circuit.

The sole issue to go is to the scope of the remedial powers of the National Labor Relations Board.

The exact issue was this, once the Board has found an unfair refusal to execute a labor contract made include in its order a provision that requires the respondent to pay past fringe benefits that would have been required to pay, if it had executed the contract at the time we fashion.

The Court of Appeals said, No, the Board may not do this.

It may not direct payments required by a collective agreement and that the remedy is not a Board order but it must be by way of suit under Section 301 of the Act.

And this, as we have pointed out in our petition and in our brief is in conflict with the views expressed in several other circumstance.

The case arose in this way, the respondent Joseph Strong is in a roofing business in Los Angeles.

In 1963, when this critical series of begun, he was as he had been for many years before a member of a contractor's association that was a multi-employer bargaining unit.

He was contractually obligated to abide by the contracts of the association negotiated with unions including one that represented his employees.

He will also as obligated if he was going to stroll.

To do so, at least 60 days before the termination of the contract period.

The old contract, that is the one that's owed in the context of this case, was due to expire in the middle of August of 1963.

Negotiations took place during the first half of that year and on August 14, the union and the contractors association reached agreement on a new four year contract to take the effect the next day, August 15.

A year and a half before in 1962, respondent had written a letter stating his desire to terminate the non-agreement and nothing came about.

Then on August 20 in 1963, a few days after the new agreement was reached, he sent a letter to the Joint Industry Union Grievance Board, expressing a wish to become a non -- to withdraw to become a nonunion member, to terminate the new contract as to him.

Although the association, the contractors association changed its status on its books and refunded a security deposit and terminated the bond that was suppose to secure his payment of fringe benefits.

The union on three occasions approached him, beginning in October 63 and then again in November and fall in April and asked him to sign the contract which he refused to do.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: We recess now.

Mr. Weinstein, you may now proceed.

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: Thank you, Mr. Chief Justice.

The Court pleases, as just before the recess, I've mentioned that on three occasions between October 1963 and April 1964, the union asked that respondent to execute the Bargaining Agreement and each time, he refused.

On the basis of these facts, the union filed unfair labor practice charges in the Board upheld and ruled that respondent had not under his duty to bargain.

On a petition for enforcement, the Court of Appeals upheld the substantive findings and last January, this Court denied respondents petition for certiorari.

So as the case stands, respondent has been finally adjudicated to have unfairly refused to bargain and the controversy goes to the Boards order.

That order is set out on pages 120 and 121 of the record.

It has in paragraph 1 some cease and desist directions which are not in controversy.

It directs in paragraph 2(a) that respondent execute and honor the Agreement that was negotiated and that is not in controversy.

The issue goes to paragraph 2(b) of the order.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: D?

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: B, after A, which directs that respondent pay to the appropriate source any fringe benefits provided for in the above-described contract.

And also an issue would be a parallel part of the notice to employees that respondent was told to oppose and this is on page 122, the third indented paragraph and that would have set in the notice, We will make hold the appropriate sources for any unpaid fringe benefits provided in the above contract.

The Court of Appeals in holding that --

Justice Potter Stewart: I don't quite understand the-- what are the appropriate sources?

Mr. Harris Weinstein: These are set out in the contract, agreed in the contract itself which are on the record, Mr. Justice Stewart - I think on page 66 - and it sets up several funds to which payments are to be made, there is a health and welfare trust, there's an apprentice trust, there are two other funds then below, there is a roofer's fund.

And these are amounts measured by the hour of each employee that were supposed to be paid to provide for a variety of fringe benefits.

The basic one is the health and welfare fund and the Roofers fund.

And that the order, I am talking to the appropriate sources to [coughing] mean to whomever each particular item would have been paid if the contract had been executed at the time we fashioned.

Justice Potter Stewart: I see.

Mr. Harris Weinstein: In finding this paragraph of the order was beyond the Board's power.

The Court of Appeals analysis was, as I understand it, that the unfair labor practice was not the failure to pay these amounts but was instead just a refusal to execute the contract.

And it said that the order was, and I'm quoting from their opinion, An order to respondent to carry out provisions of the contract and it is beyond the power of the Board.

So the Court of Appeals ruled that if an order of the Board directs payment of a benefit required by a contract, whatever else the circumstance is the Board doesn't have power to do that.

The only recourse to the union or its memberships would be a suit against the employer under Section 301 of the Act.

Now, at the time that we filed our briefs here, I believe there had been eleven cases on this or related matters and this was the only one that found the Board without power.

There are since been another case that I would like to call to the Court's attention in the Fourth Circuit.

It is called NLRB against the Beverage Heir Company.

And it is --

Unknown Speaker: (Inaudible)

Mr. Harris Weinstein: Air, Beverages and Drink and air Company and it's reported at the 69 Labor Relations Reference Manual at page 2369.

And like several other cases in the Fourth Circuit and all the other cases but this one, it allows enforcement of an order such as we have before the Court in this case.

Justice Hugo L. Black: Page 1239?

Mr. Harris Weinstein: 2369, Mr. Justice Black.

Justice Potter Stewart: Is that a Board decision or is that a Court decision?

Mr. Harris Weinstein: That is the decision of the Fourth Circuit enforcing a decision of the Board.

Justice Potter Stewart: What circuit?

Mr. Harris Weinstein: Fourth, sir.

And then the Board, part of the order that is discussed and that is enforced is essentially similar to paragraph 2 (b) of the order here.

Justice Potter Stewart: So presumably, undue course had been reported in the Federal Circuit?

Mr. Harris Weinstein: I would presume so.

Now in the final analysis, the resolution of this case depends on the construction as placed upon Section 10 (c) of the Act.

That tells the Board what to do once it finds an unfair labor practice and as the source of the Boards remedial authority.

Now, essentially, that tells the Board to do two things, First, to enter a cease and desist order which it did here; and then, it tells the Board to take such affirmative action including reinstatement of employees with or without back pay as well effectuate the policies of this Act.

A long line of cases, going back to the inception of the Wagner Act, this Court has looked at this language and it is considered what it allows the Board to do and perhaps the most recent summary of the authorities is in the five aboard decision in 379 U.S.

But the thrust of it is simple.

The Board is directed to take affirmative action and that action should be whatever is needed to restore things to what they would have been without the unfair labor practice.

And that serves two functions: First, it restores the bargaining process.

It let's operates it operate as it would have without the unfair activity; second, it takes the profit out of unlawfulness.

It takes away any hope of gain through refusing to bargain.

It deters the particular respondent and other people from illegal conduct and encourages them to voluntarily perform their duties under the Act.

Now, we would think that under this analysis, there's extremely strong case for our decision without looking further.

The Board has an affirmative duty to provide relief, to restore the status quo ante the violation.

The cases, the 11 unsolved cases that have been reported in the Court of Appeals on this subject show that basically there are two patterns.

Either as in this case, the employer has refused to execute a contract that has been negotiated by him or on his behalf and the Board, among other things, says to the employer, Pay whatever you would have had to pay if you would executed the contract in a timely fashion.

Justice Byron R. White: Does that the respondent concedes that there was an anti-practice?

Mr. Harris Weinstein: As of this moment, yes.

I think this was litigated all through petitions.

Justice Byron R. White: What specifically is the anti-practice, refusing to sign the contract or the bargain about the fringe benefits or both?

Mr. Harris Weinstein: No, it is refusing to sign the contract.

There was no -- the other line of cases --

Justice Byron R. White: Why is that an anti-practice?

Mr. Harris Weinstein: Refusing to sign a Contract?

The duty to bargain, I think, has been interpreted as requiring that ones a contract is bargained for and all the (voice overlap)

Justice Byron R. White: -- in moving employer bargaining?

Mr. Harris Weinstein: Yes, I think the authorities are set out in the examiner's opinion here which the Board accepted.

Unknown Speaker: And you say that issue is not here?

Mr. Harris Weinstein: It is not.

Justice William J. Brennan: Why is it not here?

Mr. Harris Weinstein: I don't think that there's ever been any dispute about the duty to sign (voice overlap).

Justice William J. Brennan: I thought you said something earlier, Mr. Weinstein that that issue had been resolved by the denial here set unsolved and some other case however?

Mr. Harris Weinstein: No, Mr. Justice White asked me if it was conceded here that there had been an unfair labor practice which I took to mean is the respondent is still arguing that he didn't violate the Act.

Justice William J. Brennan: That is he is never been attempted -- nobody has attempted to bring that issue here?

Mr. Harris Weinstein: His defenses were first that this unfair practice was not thought within first month of the violation of the Act; that the union, by its conduct, had waived it's right to have Mr. Strong sign the agreement.

I think those are basically the issues that we presented in this Petition for Certiorari a year ago and that the refused (voice overlap).

Justice William J. Brennan: Well, you tried to bring it here and we refused service, is that it?

Mr. Harris Weinstein: Yes, Mr. Justice Brennan, last January.

Justice William J. Brennan: And then how did this get back to the Court of Appeals now?

Mr. Harris Weinstein: Now, we had our time for petitioning.

It was not the same as the respondents because we had filed the petition for rehearing on bank in the Court of Appeals.

And our petition for certiorari was, therefore, not do until, I believe, that April and that's when we filed it.

Justice Byron R. White: If he had sign the contract, and then refused to pay the fringe benefit and refused to talk about at us those, that agreement to have been anti-practice too.

Mr. Harris Weinstein: I imagine that might be depending on the circumstances, Mr. Justice White.

For example, one of the case --

Justice Byron R. White: But here you say, it's a refusal to sign the contract?

Mr. Harris Weinstein: Yes, and what is the consequence of that?

The other line of cases, I think, falls on the category of just refusing to pay after the contract is executed.

For example, in the Stam (ph) case, which I think was in the Seventh Circuit, the employer had unilaterally amended the health program and it refused to bargain over.

And there, the amendment itself to the health program, the unilateral amendment without bargain was both a violation of the contract and a refusal to bargain.

But in either instance whether the case is like that one or this one, the Board has entered in order requiring that the employees be made whole for what they have been deprived of.

Certainly, in this case while the payment -- a mere refusal to pay fringe benefits might not have been an unfair labor practice if the contract had been sagged.

The fact that this weren't paid is a consequence of the unfair practice.

Justice Byron R. White: You say you might have been able to refuse to pay but not --he might have been able without committing an anti-practice to refuse to perform his contract but it's an unfair practice to refuse to sign it.

Mr. Harris Weinstein: I think it's certainly an unfair practice to refuse to sign.

Now whether refusal to pay is itself an unfair practice depends.

For example, if he hadn't paid because he was bankrupt.

I imagine that wouldn't be an unfair practice --

Justice Byron R. White: But I suppose that if it were an unfair practice to refuse to pay, simply you might think more -- the remedy question might be easier.

Mr. Harris Weinstein: Oh!

I think the Court of Appeals analysis would fall apart because they were alive and part on the fact that that in itself on this record wasn't the unfair practice that was found.

Justice Byron R. White: Incidentally, could the union -- I gather that these fringe benefits are payable of this fund whether jointly administered by unions so far?

May be that's not the point but (voice overlap) 301 have been maintained for these unpaid fringe benefits?

Mr. Harris Weinstein: I have some problem with that.

Certainly --

Justice Byron R. White: Is that the ground in the most Court of Appeals rely?

Mr. Harris Weinstein: I think it's the implication of what they said.

They didn't spell that out that way.

I suppose before the Boards action here, a suit had been brought under 301.

I assume that defense would have been there's no contract.

Now, if the Courts have found there was a contract, then I imagine of -- they could have directed payment of the fringe benefits.

Now, what the respondent is saying here is there must be a two-step proceeding.

First, you go to the Board to determine whether there is a contract.

If the Board says there was a contract and orders its execution, well that execution is retroactively valid but the Board can't order the payment of the benefits then you got to go to arbitration or to a 301 suit.

And it's this analysis that we are saying simply doesn't comfort with what was wrong.

Justice Abe Fortas: Well, it doesn't hurt your case if the court doesn't?

Mr. Harris Weinstein: No!

Justice Abe Fortas: If that they could bring that one under this 301, you would still be making argument you are now.

Mr. Harris Weinstein: The basis of our cases is that there are concurrent evidence.

Justice Byron R. White: Instantly, has they seen sign the contract in response to the decision system?

Mr. Harris Weinstein: I'm not sure.

I don't think that he would get being contempt if he hadn't since the order is still subject to litigation.

I don't know whether he has.

Well, the reasons -- the basis for the view that the Court of Appeals to abide, I think there are two-folds, and they find the root in legislative inaction and action.

One is that there is Section 301 which confers jurisdiction on the Courts.

The other is that Congress declined to make breach of a contract by itself in unfair labor practice.

It's a pretty weak reads but the inference of the Court of Appeals through is directly refuted by the Act because Section 10 (a) of the Act says that.

The Boards power to remedy on unfair labor practices shall not be affected by any other means of adjustment or prevention that has been established by agreement law or otherwise.

And, the interesting thing is, that Congress don't seem to get any thought that there was any possibility that it was the best thing the Board of jurisdiction to act in a case like this.

It did express some concern that Section 301 could be limited to situations where there was no unfair labor practice and the Committee report recognizes that possibility and expressly says that when there are two remedies - one before the board and one before the Courts, they are cumulative and not mutually exclusive.

Now, this Court also have to say it's not riding on a thin slake.

If my count is correct, this is the 7th time in 7 years that the Court has had occasion to comment on this particular problem.

The first three cases involves the problem that was predicted by the Congress.

Are the Courts in some manner preempted the one case, Lucas was questioned as our state courts preempted of jurisdiction by Section 301 without regard to the Board.

The next two cases, the Smith against Evening News Case in 371 U.S., Carrie against Westinghouse in 375 U.S, the question was whether the Board had exclusive jurisdiction to the delegation of the courts when there was both an unfair practice and a violation of contract.

Now, the issue wasn't before the Court in those cases but in each of the opinions, the Court took care to say that it was not suggesting that the Board was without jurisdiction and expressly said in each instance that there were dual remedies available.

The next two cases, were companion cases in 385 of US reports, C & C Plywood case and the Acne Industrial Case - and then each of those, the contention was that the Board was without jurisdiction in matters that could be adjudicated before the Courts in a 301 suit.

And in each instance, this argument was rejected.

And then, in the Great Dane case later in the same term, a similar argument had been made in the Court of Appeals but was dropped when this case reached this court.

But the Court's opinion again points out that the fact that there is jurisdiction in the courts under 301 does not deprived a Board of jurisdiction.

Now, I suppose that these cases could be distinguished from C & C Plywood and Acne Industrial on the ground that those cases involve the subject matter of the Labor Board; in this case involves its power authority where its subject matter of jurisdiction is not in issue.

But we would suggest that these cases an easier one for finding Board jurisdiction.

In those instances, the problem was there were matters in dispute that might have been resolved or left through litigation in the courts.

Here, the disputed matters at least, as the contentions have been framed, are not things that are ordinarily decided in the Courts in Section 301 (6).

The contract has been used [coughing] simply as the measure of the remedy.

It's just the same, I would think, that if the Board in ordering back pay as used in oral rate established by a contract in so many art today.

I suppose if we follow through the Court of Appeals' analysis to its logical conclusion, [coughing] the Board can no longer order back pay if the back pay is based on a rate established in a contract.

There's nothing in controversy here on what the contract means in terms of the fringe benefits.

They set out their numerical -- there's just a calculation to be made.

And all the reasons alluded in this Court's opinion in C & C and Acne would seem to require the same result here.

For example in Acne, the Court discussed the difficulties that would arise from having two proceedings and matters of that sort.

There's no reason to put the union or its members to a duality of proceedings.

There's no reason to think that the Board is devoid of jurisdiction, wants it to act to cure a violation that it's found.

I think there's one other point that requires brief mention.

Much of the respondent's brief on the merits is devoted to an argument that the grievance and arbitration provisions of this particular contract forbid the Board's action.

As I understand that they are saying that whenever there is an arbitration and grievance procedure, the Board can't make any order that could have been entered by an arbitrator.

Well, first, I think this is the first mention of arbitration in this case.

I'm familiar with no request for arbitration nor suggestion that this matter could have been arbitrated and I would assume from the way the arbitration clause is worded, it's should question whether the arbitrated would speak to the existence of the contract.

But all this isn't really pertinent because I think the Court again has disposed of the contention both in the case of Carrie against Westinghouse and the Acne Industrial case.

Each time the Court had occasion to discuss the interrelationship between arbitration and the Board's activities, in Carrie the claim was that the Board's jurisdiction excluded arbitration; in Acne the claim was the presence of an arbitration clause for the Board to act in each time the Court held that there was a duality of jurisdiction and pointed out that the reasons that were applied in Steelworkers trilogy to require the courts to defer arbitration didn't apply in a Board proceedings.

No doubt the Board here could have, if the matter warranted it send them direct arbitration.

It could have deferred to arbitration.

But there's absolutely no reason why it had to withhold its hand and instead rely on some other internal inter-party process.

Thank you.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Mr. Bakaly?

Argument of Charles G. Bakaly

Mr. Charles G. Bakaly: Mr. Chief Justice, may It please the Court.

At the outset, I would like to emphasize four questions of facts that would -- should keep on mind.

First, Mr. Strong was bound by the industry contract as a matter of law at the time that it was negotiated in August of 1963.

The bylaws of the association so provided, the Board's brief, page 2 concedes the record 35 and sets out the bylaws.

Under Wylee vs. Livingstone in this Court's decision, Section 301 action that appellee arbitration would certainly have been proper in Wylee as you recall.

The employer, who was held to be bound to arbitrate that was not a party to the Contract as predecessor company was a party and this Court held that he must arbitrate.

Furthermore, that the failure to pay fringe benefits was not alleged that's an unfair labor practice.

So either the complaint or found by the Board or the Court of Appeals.

The order finally is to pay to the appropriate source any fringe benefits provided for in the above-described contract.

We feel that this case presents for the first time a conflict between a national labor policy preferring arbitration and the position of the Labor Board that it has the power to decide whether we have breached the contract by the failure to pay fringe benefits.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Is that the gist of your argument?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Yes, sir.

That is basically, Your Honor.

A similar conflict, the course has been resolved by this Court, a conflict between Courts and arbitrators had been resolved by this Court in the now famous trilogy wherein the policy was set that in labor management matters it is for the arbitrator to decide that a Collective [coughing] Bargaining Agreement is not a contract and from our law, it says it's a code of conduct and that the arbitrator should be free to imply provisions that may or may not exists.

Now, the same reasons apply that to keep the Court out of such disputes, to keep the board out of such disputes.

As this Court said, the ablest judge cannot be expected to bring the same experience and competence to bear on the determination of agreements.

Similarly, the Labor Board, just as the Court, does not have the competence.

The Labor Board has been given by Congress competence in its field to determine whether the Act has been violated.

It is not, we submit.

With all due respect, they've given the Labor Board competence to decide breaches of the contract.

The Labor Board interestingly enough in several very recent cases, we respectfully submit it as demonstrative and it is not so competent.

And Adams Jerry this case is we have not cited in our brief.

They are Labor Board cases but in a series of Labor Board cases commencing with Adams Jerry, including the CNS Industries, the Labor Board has held that if the contract is silent about a particular provision, then the employer or the union, whoever it may be, is not bound or arbitrate or the Labor Board can interpret that provision in a way it wants.

Now, that is a strict disagreement with the decisions of this Court and the Trilogy that holds that where a contract is silent, an arbitrator might well imply a restriction or a right from the conduct of the parties or from other source.

The reading case, the Warrior case in this Court was a subcontracting case.

Here, in Adams Jerry the Labor Board held that you shouldn't have to go to arbitration because the only thing the arbitrator can do was to interpret the contract under its provision.

This, to me, shows that the Labor Board does not competence of the trilogy and the arbitrator has more power than to just interpret the contract.

He has the power to regulate parties from all of --

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Suppose in this case a Labor Board or the respondent in this case had, in addition to refusing to sign the contract that fired all the employees, could the Board then find that that was an unfair labor practice in order to be restored?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Or the employees restored, yes.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: They could have?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: They could have ordered the employees to be reinstated --

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: With back pay?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: And they could have ordered back pay and that's specifically provided for under the statute.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Why couldn't the fringe benefits go with it?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Well, that's the very hard question in this case, Mr. Chief Justice but --

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: (laughter)

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: The reason, I think, first of all goes to the fact that if they had discharged the employees, they would have done so with an Anti-Union Analyst and I do think that it could be a distinction between the employer acting with the Anti-Union Analyst and an employer acting mistakenly but in good faith.

And here, this employer, it was so found with an honest belief that he had withdrawn from the association.

He has not done so but he was not engaged in trying to destroy the union.

And that itself facts, I would not say that the Board could not, as a question of power for the fringe benefits.

That is not in this case and I would say that it's a question of policy.

A Board should not order fringe benefits even in back case.

The Board should reach the threshold question.

If I may say, it has the Act been violated.

And then as the Court so required to do, leave to an arbitrator that he cite what the provisions are, what the employer should do and then what the union should do of them in the threshold question.

In your case, Mr. Chief Justice, reinstate the employees and Labor Arbitrator decide the fringe benefits.

To me, a question of policy is among orally ways to effectuate policies of the Act which are to have the parties decide through a system of arbitration under Section 203 (d).

Justice Byron R. White: What was the Unfair Labor Practice Union?

Mr. Charles G. Bakaly: (Voice overlap) was refusing to sign the contract --

Justice Byron R. White: Which is a violation of what?

Mr. Charles G. Bakaly: Section 8(d).

It's A5 but also it's 8(d) of the Act specifically states that they signed the contract that has been agreed to.

I know if you will agree with the Board that they were bound of this association and it was agreed to under 8(d) of the Act, the employer was (voice overlap) to sign the contract.

Excuse me.

Justice Byron R. White: Your argument then doesn't rely at all on whether or not there was an action under 301 available to the union?

As I heard you so far, your emphasis has been that there was a contract.

The bylaws of this association made it so even though they haven't signed it but under the circumstances, the arbitration probations were enforced and this is only a dispute arbitrable under the arbitration clause.

And that's, as I understand, your argument.

Mr. Charles G. Bakaly: That is correct.

And that the union could have brought the 301 action --

Justice Byron R. White: So you're relying on that also.

Mr. Charles G. Bakaly: We're relying on that but obviously under (Voice overlap) the Evening News there is contract jurisdiction.

I believe in that case, if I'm not mistaken, the Court said there will going to be problems over the fact.

There's concurrent jurisdiction and this is one of those problems but we're accepting that.

We're not suggesting this meant where as the Evening News goes.

You overruled by any means and there is contract jurisdiction in the case like this.

Unknown Speaker: That's between what is it?

Mr. Charles G. Bakaly: Between arbitration and the Labor Board or Court to compel arbitration to go to the Labor Board.

The arguments against?

Unknown Speaker: Well, why doesn't the idea of Evening News answered this question?

Mr. Charles G. Bakaly: Well, Evening News merely decided that a Section 301 action would lack and did not decide the question of the power of the Labor Board to interpret the breached contract and Congress had before to see when the Taft–Hartley Act was passed the proposal.

But the Labor Board being given the power that the breach of a contract was an unfair labor practice, Congress refused to pass that portion of the statute and we think that is evidenced of a Congressional purpose not to give the Board jurisdiction over matters like this where they have to get into and I -- just a moment.

I get to the items that they are going to have into this.

This is not just the question of calculating benefits.

They're going to have to interpret this agreement.

And we submit that that's for an arbitrator to do.

Now, let's get to the arguments that the Board had made that it is a windfall here to the employer.

That is not correct, may it please the court as we read the Enterprise case which was one of the trilogy and which the Collective Bargaining Agreement had expired, which agreements or disputes had arose at these employers obligated to arbitrate today; obligated to arbitrate now the question of fringe benefits.

And the only reason the employer has not signed the agreement the employer has not yet signed the agreement if they could have offered to and the Regional Director said,Well, why don't you wait until that Supreme Court decides and then we'll give in the compliance.

The employer is ready to sign and will sign yes, sir.

Unknown Speaker: Does the record show a dispute as to the fringe benefits not as to whether they should be paid but as to how they should be paid.

Mr. Charles G. Bakaly: This matter, of course, tell that employer was found obligated to the contract, had never reasoned.

That was the employer's first assessment.

But right now, under the contract --

Unknown Speaker: As I recall, all they had to be done is to calculate the hours that it should be reflect on employees work, is that right?

Mr. Charles G. Bakaly: No, sir, that is not correct.

Let me first draw the, starting on page 62 and 63 of the record, list the fringe benefits.

They might be subject to cut duration although it's a fairly complicated Collective Bargaining Agreement as I'm sure you realize.

But on page 71, this is the first place, it lists a series of penalties that will happen to an employer if he does not pay the fringe benefits.

And there it says, paragraph f, A contract here may be absorbed of any or all foregoing liabilities if he satisfies the trustees if he has failed to pay any contributions or to report because of honest mistake in the contribution's, clerical error, or other reasons satisfactory now.

The labor Board shouldn't decide whether under these circumstances the employer should not have to pay these penalties because of honest mistake that he was obligated.

The Labor Board should not decide that.

The arbitrator opt to decide that.

The arbitrator might well decide here.

Excuse me.

Justice William J. Brennan: First thing has to be done, and this is how I read it, is that they submit it to the trustees.

Mr. Charles G. Bakaly: It's Correct.

Justice William J. Brennan: And the trustees, are trained that -- I don't know.

What is this set up here.

The trustees opponent by the both union and management?

Mr. Charles G. Bakaly: Yes, sir.

Justice Abe Fortas: Industry why the Collective Bargaining Agreement?

Mr. Charles G. Bakaly: Yes, sir.

Justice Abe Fortas: So the right, so the trustees representing the unions and some trustees representing management throughout the industry, at least cited industry, covered by this Supreme Court.

So what they would do under the Board order, I think, it is to go to trustees and the employer would say, Well, we calculate that this is X and here's what we owe you?

And if the union disagrees, that would say no.

He would say to the trustees that we think the company owes us more?

Mr. Charles G. Bakaly: I don't think that's what the Board has in mind at all, Mr. Chief Justice Fortas.

The Board has in mind going to the compliance officer in Region 21 of the National Labor Relations Board and letting him decide whether we have a good faith in that.

They don't have in mind going to the trustee?

Justice Abe Fortas: -- and what it says the Board order -- I assume that the Board order was phrased or a peculiar way it is just to provide for payment to the trustees and the submission in matter to the trustees as if it worked than made under the Bargaining originally.

Would you mind telling us, I've forgotten the exact language of the Board order if they shall pay the fringe benefits or what?

Mr. Charles G. Bakaly: Pay to the appropriate source any fringe benefits provided for in the above-described contract?

Justice Abe Fortas: -- phrase appropriate source just to mean the trustees under the Collective Bargaining Agreement, am I wrong about that?

Mr. Charles G. Bakaly: As far as the appropriate source under the direction of the compliance officer of the Board, I don't believe they are going to permit the trustees or an arbitrator to this stage or leave us of the payment again in these benefits if they find for example that we should have to --

Justice Abe Fortas: Benefits are not payable to the individual and employee directly, was it?

Mr. Charles G. Bakaly: Oh!

No, it's paid to the --

Justice Abe Fortas: It goes to the trustees?

Mr. Charles G. Bakaly: It's paid to the appropriate source of a trust fund.

Justice Abe Fortas: Meaning the trustees?

Mr. Charles G. Bakaly: The trust fund.

Justice Hugo L. Black: The trustees?

Mr. Charles G. Bakaly: That's right.

But their different --

Justice Hugo L. Black: In the order it does not fix them out.

Mr. Charles G. Bakaly: I'm sorry, Mr. Justice.

Justice Hugo L. Black: In the order it does not fix them out?

Mr. Charles G. Bakaly: What it says is in accordance with the agreement.

Justice Hugo L. Black: So that has to be determined later by somebody.

Mr. Charles G. Bakaly: That's right and I'm sure --

Justice Hugo L. Black: You haven't reached that point yet?

Mr. Charles G. Bakaly: I think we have if I now in practice one of -- I've never heard of anyone other than the Board compliance officer having anything to do with disputes as to the meaning of the Board order in any other back pay proceeding.

This is another policy, the reason why we suggest that the -- ought to be the law.

This is not the end of this matter.

There's going to be some disputes here.

I think what will happen (Inaudible) indication is if we don't agree with the compliance officer, we will go to a back pay hearing.

Justice Hugo L. Black: I suppose you went to fix it.

Mr. Charles G. Bakaly: Before the Board; that's before the Board.

Justice Hugo L. Black: (Voice overlap) and you found a protest, who would determine that?

Mr. Charles G. Bakaly: A back pay?

Let the Board speak but my practice has been that a trial examiner on the Labor Board will be heard.

Justice Hugo L. Black: Did you demand an arbitration on the agreement?

Mr. Charles G. Bakaly: I don't think so.

That is as long as this order is in effect --

Justice Hugo L. Black: (Inaudible) of the amount.

Mr. Charles G. Bakaly: As long as this order is in effect, it's within the jurisdiction of the Board and the compliance practices of the Board.

Justice Hugo L. Black: Are they taking the place?

The trustees has taken the place of those workers, was it?

Mr. Charles G. Bakaly: Has taken the place?

Justice Hugo L. Black: Who is getting to be paid concern, the trustees has taken the place of the worker.

Mr. Charles G. Bakaly: That's correct.

Justice Hugo L. Black: I suppose that the dispute between the company and the workers (Inaudible) backpay, would you have a right to have that right on arbitration?

Mr. Charles G. Bakaly: I don't --

Justice Hugo L. Black: You have to have it for the Board and accept that position --

Mr. Charles G. Bakaly: That's their position as my understanding, Mr. Justice Black.

They can speak to that but that's my understanding that it will be the Board, in any wage case, as Mr. Justice Warren stated, an ordinary discharge for union activity case and you have a dispute with the Board about how much you owe that person, that dispute is solved.

And a back pay here before another representative of the Labor Board and you have another case.

That goes up now.

That's why, we say that right now is the time to not enforce this portion of the order at this time but leave the parties to enforce it either themselves.

May be the parties will get together and agree how much is do and resolve this whole thing.

Justice Hugo L. Black: When do you expect to get back?

Mr. Charles G. Bakaly: Well, what we expect to get by an (voice overlap) arbitrator is just this kind of back pay, Mr. Justice Black.

This is a small employer.

He thought he could not compete and meet the union wage scale.

And that's exactly the story and we tried to get out of the union and he got jobs that he probably wouldn't have gotten, wouldn't have obtained if he had to pay all the conditions and so forth.

Now, we think that is a factor that an arbitrator would take into consideration that?

Unknown Speaker: Did the arbitrator was left to get off a lesson on the fringe benefit?

Mr. Charles G. Bakaly: Might well here because his employees were not union employees.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Was he allowed to use equitable fringe benefit?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Yes, sir.

As we stated -- And an arbitrator you can look at production, productivity.

He can look at all sorts of things that a Court and a Board can.

That's the purpose for the trilogy as Mr. Justice Douglas brought it.

That was the purpose of it.

An arbitrator, in the rule of common law, in the rules of the (Inaudible) so far to arrive at the decision that the court or the Labor Board would not arrive at.

And then this is what we think.

Here there's an equitable argument here.

This man would not have hold these fringe benefits if he had gotten the jobs and the only reason he got to work, put on the rules, was because he didn't have to pay these fringe benefits.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: And so you mean he got them on a lower price?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: That's right.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: And now, an arbitrator might say, Well, under all these circumstances, he thought he was out from under the agreement and therefore he ought not have to pay more than the fringe benefits less access.

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: That's right.

Now, this penalty they might issue and have to pay this because it was an honest fall, that is not a false act to try to destroy the union a little of what it was and some other and further operation.

Justice Hugo L. Black: Well, I cannot under this --in compliance proceedings on the Board, may the Board make a similar determination?

Mr. Charles G. Bakaly: I've never known that, Mr. Justice Black.

(Voice overlap) I've never known that the Board in compliance proceeding doing anything but determining the matter for themselves in the Board and can speaks for itself.

Justice Hugo L. Black: Well, I mean, I've certainly have back pay orders or adjustments to back pay depending on whether or not the affected employees have really tried to get other work in that sort of thing.

So the non-familiar would adjustments to that sort.

Mr. Charles G. Bakaly: Well, its' normally done in the context of the back pay hearing without official --.

Justice William J. Brennan: My question really was, in a back pay hearing it might not be a determination of the amount do in a way of fringe benefit which might take into account some of the things which you think an arbitrator will?

Mr. Charles G. Bakaly: I don't have that confidence in the Board, Mr. Justice Brennan when in these cases like I just read Adams Jerry and so are they, they looked at the agreement.

They say, If the Collective Bargaining Agreement does not contain a subcontracting clause, then there's nothing to arbitrate.

That is directly contrary to that, Mr. Justice Douglas.

This decision in the trilogy directly contrary to it.

The Labor Board, in all due respect, is competent in determining whether unfair labor practice is, it has very little competence and has evidence to it by these recent cases in one of breach of contract is in this area.

Excuse me, sir.

Justice William J. Brennan: No, I just asked you what you said by a little contract?

Mr. Charles G. Bakaly: A very low competence in interpreting competence, in interpreting Collective Bargaining Agreement.

Justice Hugo L. Black: Is that command which trying to shift himself from a judge to the jury in order to appeal to the equitable (Inaudible)?

Mr. Charles G. Bakaly: Well, this is the system that we are under, Mr. Justice Black.

When you have a contract that has a monetary arbitration clause, you're under the system and I guess it's been very few times that an employer stood before this Court and contended for arbitrability.

But were here and were so contending because we are accepting the principle.

We shouldn't have to have two proceedings; we're going to have another proceeding.

Now, there are --

Justice Hugo L. Black: (Inaudible)

Mr. Charles G. Bakaly: I was about to say there are -- Excuse me, sir?

Justice Hugo L. Black: Suppose this fringe benefits, the amount of these fringe benefits was just a mathematical question of that so many mandates, would your argument be the same?

Mr. Charles G. Bakaly: Well, no it would not because an arbitrator still could be able to say, as I mentioned under this circumstances, I'm going to say that equity dictates at the employer not have to pay even though it was trickily calculated.

You see, before the trilogy.

Justice Hugo L. Black: Your argument would be the same then as well, that is this.

Now.

Mr. Charles G. Bakaly: Yes, it would be the same.

Excuse me, I must have misspoke that.

Our argument would be the same as it is now.

Justice Hugo L. Black: It would be the same.

And would you think an arbitrator could completely excuse you from any favor?

Mr. Charles G. Bakaly: Yes, sir.

And this Court has so held.

This Court and nothing down the Cutler Hammer doctrine which said that you couldn't arbitrate a dispute if the language was clear and unambiguous.

This Court knocked that doctrine down and correctly so even though the language is clear and unambiguous.

Justice Hugo L. Black: (Voice overlap) pretty clear?

Mr. Charles G. Bakaly: The parties have contracted even though the language is maybe clear and unambiguous.

The parties have contracted to have an arbitrator decide this.

Justice Hugo L. Black: Have an arbitrator which decide the equity of?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: Just kind to review it if they accept the agreement?

Mr. Charles G. Bakaly: Yes, sir.

That's right.

That's entirely possible, Mr. Justice Black, entirely possible on the Labor context.

Entirely possible and yet it's not clear here.

Let me say that --

Justice Thurgood Marshall: Well, I understand that originally, they took the position that the respondent did not design the contract because he didn't recognize this bonding?

Mr. Charles G. Bakaly: That is correct, that position was there.

Justice Thurgood Marshall: And then, nothing would gone until this action went into the NLRB?

Mr. Charles G. Bakaly: That is correct.

Justice Thurgood Marshall: And then, it was found that it was a contract.

Mr. Charles G. Bakaly: That's correct.

Justice Thurgood Marshall: And now, you shift your position in saying that you want to operate under the contract which still are the same.

Mr. Charles G. Bakaly: Well, we've offered the same, Mr. Justice Marshall.

Somebody had to decide.

There is a serious question here in the statute's limitation.

Justice Thurgood Marshall: The fact that you didn't sign it is a reason that the NLRB took jurisdiction?

Now, you want to oust to my jurisdiction, right?

Mr. Charles G. Bakaly: It was up to the expert.

Justice Thurgood Marshall: Is that right?

Mr. Charles G. Bakaly: That is correct.

But it's up to the union, Mr. Justice Marshall.

They could have filed a grievance and they could have gone to arbitration and they could have compelled us to do so.

We had, as I said earlier, the Labor Board decide, can decide here the threshold question.

Was there an unfair labor practice by refusing to sign the contract?

That doesn't mean they have to take the case for all purposes.

Fabricated proceedings are nothing new to this Court.

That's what is count by the trilogy.

Justice Hugo L. Black: Well, I gather it sensually that your argument law is that, are the Board simply has no authority, power, whatever words you want to use to enter the kind of order they did here as to the fringe benefit, am I right?

Mr. Charles G. Bakaly: Correct.

Justice Hugo L. Black: And this is on the ground that this is a contract matter and that section dealing with sanctions has to be interpreted as not authorizing a sanction which goes to the interpretation to the agreement itself that that must either be a matter for the arbitrator because this arbitration provision here or in any event for the Courts since there is no arbitration proceedings, is that it?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: You have the proceeding divided up in two parts?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: The Board to determine one part and an arbitrator will know it.

Mr. Charles G. Bakaly: Nothing unusual about that.

That's correct.

There's nothing unusual about that.

That what happens if an employer contends a dispute is not subject to arbitration.

Under the agreement, the Court first determines whether it is and if it determines that it is, you don't have an arbitration.

There's nothing unusual about that.

We're going to have that hearing, Mr. Justice Black, because I'm sure there's going to be a back pay hearing in this case because there are questions in the Collective Bargaining Agreement as to meaning and intent.

It says there are certain penalties for the non-payment of health and welfare benefits yet it says a contract too an important and may be absorbed if he is in good faith.

And, somebody is going to determine whether we have to pay these penalties or not.

There are provisions here about hours of work.

That may well be a fringe benefit.

Well, I don't know what a fringe benefit is and I'm sure you can make a good argument that hours of work is a fringe benefit.

What about if it says work must be done outside the regular working hours for the protection of life or property?

The Labor Board cannot decide that back pay here?

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Well let me tell you would be very happy of what the Labor Board says of what it means that you were to pay whatever is to be determined and that the determination is to be made pursuant to the contract including (Inaudible) up to the extent available arbitration then you'd be happy.

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: If the Labor Board permits the arbitrator to determine this, yes, sir.

Justice Abe Fortas: Now, apart from what the arbitrator will determine on what your construction of the trilogy, which you call it trilogy, if the Board says that our opinion, our order means that you have to pay what you're obligated under the contract and that's to be determined in accordance with the provisions of the contract.

I don't know whether it will or not but it says here that (Inaudible) of you could be very happy.

Mr. Charles G. Bakaly: I think that's what law would be.

In arbitration there's no misunderstanding.

In that arbitration, we would contend that even though it says 7 cents an hour, the health and welfare because of this equitable considerations which shouldn't have paid any.

Justice Abe Fortas: I know you say that and then the arbitrator may or may not allow it and if he does agree with you, the Court may or may not overrule.

Mr. Charles G. Bakaly: It would be very surprised, Mr. Justice Fortas, that the Court will overrule an arbitrator.

If he rules on our favor, we would have to take what is the decision.

Justice Abe Fortas: That's because of what Justice Douglas wrote in the trilogy.

Mr. Charles G. Bakaly: Of what this Court said.

There's some other provisions but from Labor Board he's going to in this case after interpreting this Collective Bargaining Agreement.

We think that that is for the arbitrator to do and it would be an orally procedure.

There's not going to be unneeded bifurcation.

The policy of the Act as counsel here has said [coughing], also as a section in Section 203 (d) the final adjustment by a method agreed upon by the parties is hereby declared to be desirable method for settlement/agreement of disputes.

And, we submit that a threshold question?

Fine, but the Labor Board decides or a court concurrent jurisdiction.

Once the Labor Board has decided there's a contract, then let's have all of the contract be applicable including the grievance and arbitration provisions of the agreement.

Thank you.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Mr. Weinstein?

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: If, Mr. Chief Justice of Court pleases, I simply suggest that all the arguments that have been advanced in this court, in that arbitration which were not advanced before the Labor Board and the Court of Appeals are all disposed of by Mr. Justice Douglas as an opinion for the Court in Carrie against Westinghouse where the Court discusses the considerable length of the relationship between arbitration and Board proceedings, makes clear that these are alternatives available to the complaining party and goes so far to say that in the event of conflict, the Boards ruling would have coursed to take precedents.

Now, as that opinion points out, the Board may and has in a variety of occasions deferred or invoke the arbitration of a circumstances seems appropriate and the parties asked for it in a timely and proper way with three simple grounds for doing it.

But that has to be done in a timely way before the Board.

It has nothing to do with the Boards power and that is the only issue here.

The Board can, if it wishes use arbitration, if the disputes develops in calculating what is due under this order here.

The Court can, if it wishes, go to the trustees under this agreement.

It can call them in, it can invoke arbitration.

Justice William O. Douglas: Well, let me see of (Inaudible) statute.

What you are saying is that the way this agreement would work would be that the company would be required to withdraw that.

What you said, I don't understand how this agreement would work.

The Board says, you must pay whatever you owe under the contract.

Company says, Alright, here's what we calculated.

We owe $25 under the contract and we pay that to the trustees.

And if there's no objection on that, that ends the matter, alright?

Mr. Harris Weinstein: Yes, sir.

Justice Abe Fortas: Then they say that to the Board, they will report to the Board that the compliance officer will pay $25 to the trustees.

But suppose the union comes in and says, that isn't correct.

They owe $2500 and now what happens?

There are two possibilities; one is the determination of that amount would be made by the contract machinery; the other possibility is that the Board itself would undertake to determine the amount which means that would have to construe the Collective Bargaining Agreement.

Now, what is the Board's position?

Mr. Harris Weinstein: Mr. Justice Fortas, the Board's decision is that it has the option.

If there was a dispute, the Board would hold a proceeding to resolve the dispute.

Justice Powell would hold the proceeding to determine whether there's been an unfair practice.

Unknown Speaker: I don't say it has the option because the Board issued an order.

The question is what does the order mean if you ordered these people to pay pursuant to the contract?

If you order them to pay pursuant to the contract, the next question is whether that is to be determined in accordance with the machinery provided by the contract or has the Board pro tanto displays that machinery of the contract.

And those are the questions that are right here right now.

Mr. Harris Weinstein: I think the fair answer to that was that because there was no suggestion before that anything other than a mathematical computation was required.

The Board, in writing its order, didn't consider whether pursuant to the contract incorporated submission to the trustees under what I told the state clause of the agreement.

It seems to me that if that contention is really to be brought in that there would so equitable grounds that would require a lesser payment that the mathematical computation calls for that the burden would be on the employer, dwell into the Board and request elaboration of its order.

It seems to me that the Board has the authority to do it either way.

And in this case, what's been brought into oral argument here is a matter that was not brought to the Board itself in a timely fashion.

I don't think it was controverted.

Unknown Speaker: May be that's your answer.

May your answer is that we are not to consider the question of how the amounts to be computed because you went to raise below.

Mr. Harris Weinstein: It wasn't raised below?

Unknown Speaker: (Voice overlap) consider it but if on the other hand you are giving us what you should take an official answer from the Board, that is to say that the Board can determine how these amounts can be computed, the Board can determine that the contract machinery will be used or won't be used.

If that's your position, the letter is your position and I confess I have some problems.

Mr. Harris Weinstein: I think I would start by saying that because of the ordinary course of Board proceedings disputes over computation would be resolved after the order becomes final that the issue wasn't before the Court.

I would suggest though that if the Court would going to decide that issue against the Board, it would require considerable back tracking on the analysis on the Carrie opinion and the Acne opinion.

That it would require what we would suggest this an inconsistency with Section 10 (a) of the Act which says that the private --

Unknown Speaker: (Voice overlap) but let me answer you.

It takes additional time here but let me see if I put it this way.

The question here is doest the Board have power under the Act to order the payment of fringe benefit provided for in a contract?

The objection is, as I understand it, that would amount to the Board interpretation and enforcement of a contract.

Now, do you tell me that the Board has merely ordered the payment to be made the amounts had been determined in accordance with the contract by the contract machinery?

That gives this question more in particular case.

If on the other hand, you tell me that the Board has in effect going to supplant the machinery provided them in the contract.

Insofar as the determination of the amounts all that it concern that to my mind make give this legal problem we have before is a very different case.

Mr. Harris Weinstein: I would think that as the case is framed and as -- because of the arguments had been made earlier.

What you've stated as your second reading of the issue isn't in the case.

It's not.

I think that the -- again, I would refer the Court to the matters discussed in the Carrie decision which showed the way, the Board decides whether to defer to contract machinery.

Thank you.

Rebuttal of Chif Justice Warren

Mr. Chif Justice Warren: Very well.

Featured:

NLRB v. Great Dane Trailers - Oral Argument

Thu, 23 Aug 2012 18:30:45 +0000

Case:

NLRB v. Great Dane Trailers

Media File:

781_19670419-argument.mp3

Related Transcript:

781_19670419-argument

Transcript:

Argument of Arnold Ordman

Mr. Arnold Ordman: -- appeals for the Fifth Circuit which denied enforcement to a board order.

The Board's order was based on a finding that the employer, Great Dane Trailers, Inc. violated Section 8 (a) (1) and (3) of the National Labor Relations Act by denying payment of previously earned vacation benefits to strikers who elected to remain on strike or who had been replaced while paying such benefits to nonstrikers and strikers who abandoned the strike and returned to work by a certain date.

The court below denied enforcement to the Board's order on the ground that this disparity of treatment, notwithstanding the return on strike activity was not unlawful despi -- absent, an independent showing or an illegal motive on the part of the employer.

Now, the record is devoid of evidence that apart from the disparity of treatment itself, the employer had a subjective intent to penalize the employees for their strike activity.

Justice John M. Harlan: That's the common ground in this opinion.

Mr. Arnold Ordman: That is correct.

And the question presented here is whether such independent evidence of subjective intent is in the circumstances here presented a pre-conditioned or finding of unfair labor practice.

Now, before stating the facts, I think it would be helpful to note very briefly that we see the issue in this case as paralleling the issue in Erie Resistor.

In that case, as the Court will recall, the employer awarded super seniority, super seniority to replacements and returning strikers as against those who remained on strike and the question presented there as here was whether you would had to have an independent showing of an intent to penalize strikers, has a precondition to finding an unfair labor practice in that case and this Court held that such a showing was not required.

Now, Great Dane Trailers, Inc. manufactures truck trailers in this plant in south, I mean its plant at Savannah, Georgia through its employees for some years have been presented by the Boilermakers Union.

The most recent collective bargaining agreement between the company and the union was for a three-year period which expired in March 31st, 1963 and was terminable thereafter upon proper notice by either of the parties.

Now, so far as relevant here, that agreement provided that employees with more than 60 days of service, would receive annual vacation pay on the Friday nearest July 1 of each year.

Those who had worked at least 1525 hours or approximately 38 weeks, the proceeding year would receive a weeks vacation pay and for those who work less, in as little actually as a 169 hours, they got a diminished scale of payments which was actually set forth in the contract for those who work fewer hours.

Now, employees who had at least five years or more of continuous employment to the company got double paid.

But the agreement specifically provided that those workers who quit or were laid off were otherwise terminated even during the course of the year and didn't survived until July 1st nevertheless would get pay if they had worked the minimum 60 days.

On April 30th, 1963, the union gave timely notice to terminate the agreement as of May 16, approximately two weeks later.

And on May 16th, the union went out on an economic strike to support its bargaining demands.

And about 348, I believe, of the company's 400 employees joined the strike.

Now, within a matter of six weeks, by July 1st, about 259 of the 350 strikers had been replaced and a few of the other strikers went back to work.

The strike, however, continued for several months longer.

But early in July, about 300 of the strikers individually and through their union, asked the company for the vacation pay they had earned under their agreement which had now been terminated.

The company replied by a letter, which was dated July 12 and says -- said in effect, “Because you, the union, have terminated the agreement, there isn't any provision for vacation pay in effect and suggested that may be that matter could be taken up at the bargaining negotiations.”

Justice Potter Stewart: Well, that was true the agreement was no longer in effect and it was only because of the agreement that they had any right to vacation pay as of July 1st, isn't that correct?

Mr. Arnold Ordman: That is right.

That was a working condition set up by the agreement but under the terms of the agreement and while it was in effect, this right had accrued.

This was work pay they had during the period of the agreement.

Justice Potter Stewart: That -- that was and remained an issue, I suppose, between the parties, is it not?

Mr. Arnold Ordman: That's right because the agreement was in effect until May 16th, just six weeks earlier.

Justice Potter Stewart: But it provided for no payments until July 1st, as I understand.

Mr. Arnold Ordman: It provided that payments would be made on the Friday near July 1.

Justice Potter Stewart: And as of July 1st, there was no such agreement.

It was -- and it was only because of the agreement that there was any right as of July 1st.

Mr. Arnold Ordman: Not exactly because under the agreement itself, for example, people who had been quit or discharged during the year and prior to that date were entitled to pay and did receive it.

Justice Potter Stewart: On July 1st?

Mr. Arnold Ordman: The record shows it.

On July 1st.

Justice Potter Stewart: So that remains an issue between the parties, is it not?

Mr. Arnold Ordman: That's correct.

Now, the company -- their company suggested that this matter might be resolved at the bargaining table, which is also in the record an indication they suggest that this might be resolved by an independent lawsuit under the contract.

Now, needless to have at this point, there weren't any bargaining negotiations so far as the record shows on this issue but -- and I think it is a matter of law and not in dispute that the employees couldn't be forced to bargain away any contract rights or statutory rights which they have or which had accrued.

Now, shortly thereafter, in August -- and this was in July -- in August, the company did make vacation payments to all the nonstrikers and to those strikers, who had abandoned the strike before July 1st, and had not been -- and had not been replaced but the returning strikers even those who returned who were replaced and those who elected to continue to exercise their statutory right to strike, received no vacation pay even though under the -- during the existence of the contract their right to vacation pay had accrued.

Now, the company defended its action before the Board on the ground that the payments were made, that the payments that were made were made not under the contract which has been terminated but under a unilateral policy which it said that it adopted following the termination of the contract but it concedes, and these are its own words, that the unilateral policy incorporated substantially the same conditions as to the contract.

Now, as for its refusal to make payments to those who continued on strike and to replace strikers, it simply explained that, well there was a break in the length of service and the employees who weren't -- didn't get paid were not working as of July 1st and the strikers who were replaced weren't employees at all.

Now, the Board found that by denying this vacation pay, the strikers who would not abandon the strike or had been replaced, the company discriminated against them because of their adherence to the strike, their continued exercise of the right to strike.

Now, whether the company made its selection of who got paid and who didn't get paid, pursuant to the contract provisions or pursuant to its unilateral policy which have formulated after the contract terminated, the Board said this was really immaterial.

They're not under the Board's holding, it stated, was that under the law, strikers have to be treated uniformly with nonstrikers with the relation to whatever benefits accrued to them from their employment relationship.

In this connection, incidentally, the Board did order that the strikers be awarded back pay but it specifically excluded any compu -- that computation of the back pay due them anytime in which they were not working and which they were on strike.

The Board incidentally also agreed and this is agreed that there wasn't any independent subjective evidence of disparity of treat -- of intent to penalize strikers.

Now, the court below disagreed with the Court.

Before the court below, we urged the Erie Resistor principle and the court below made no mention of Erie Resistor.

Instead, it cited the more recent decision of this Court in the American Ship Building case and it said that the American Ship Building case stands for the proposition that if the employers conduct carries with it any other inference, any other inference of a legitimate motive, the inference of illegality which would otherwise bring does not control.

Now, the Court recognized that the record in the case before it, did not disclose any such legitimate motive and I take it that means that it rejected the reasons the company gave it before the Board.

It said the record doesn't disclose any legitimate motive but the court below itself suggested legitimate motives which might have motivated the employer.

For example, it suggested that may be the company did what it did to reduce expenses.

Maybe it did it to encourage longer tenure among the present employees or may be it did it to discourage early leave before vacation periods and because the court below said because these motivations may have existed and the court below concluded that the Board was required to and failed to establish of the company's action were prompted by some independent motive to penalize the strikers and the court denied the petition for enforcement.

Now, there is some subordinate matters to which I think are adequately covered in the brief.

I'd like to reach what I think is the overriding issue, whether the interpretation put by the court below on the American Ship decision and its apparent rejection of -- we think its apparent rejection of the Erie Resistor principles applied to the fact of this case.

Now, we think the Court of Appeals here as an Erie Resistor, erred in holding that in the absence of a finding of a specific illegal intent, a legitimate business purpose is always a defense to an unfair labor practice charge.

Now, the court below doesn't, this Court does not and we do not again say the relevance and the importance and even then the necessity in 8 (a) (3) cases of showing an employer's intent or motive to discriminate or to interfere with union rights.

But as Radio Officers has established, specific evidence of such subjective intent is in Justice Reed's language not an indispensable element of proof of violation.

Now, such evidence is required, of course, in the typical situation.

Take the normal discharge case which still is a large portion of the National Labor Relations Board work.

There, many otherwise innocent or even ambiguous actions which are normally incident of the conduct of -- an employer's conduct of his business are exempt from the Act's stretches, unless specific intent of -- specific evidence of a subjective intent to discriminate or encourage or discourage union activity as shown.

Now, this requirement is imposed because there's nothing in the nature of a conduct itself in the normal discharge case; there's nothing in the conduct itself which necessarily and foreseeably evinces a discriminatory purpose or effect of which is inconsistent with the employer's normal operation of his business.

But we suggest that this category of cases has to be distinguished from the much smaller category and this Court has done so from the last frequent type of case typified by Radio Officers, by Erie Resistor and we believe this case, where the necessary foundation of discriminatory intent derives from what this Court has called the “inherently discriminatory” or destructive nature of the conduct itself.

Justice Byron R. White: Mr. Ordman --

Mr. Arnold Ordman: Yes, sir.

Justice Byron R. White: -- let's assume for the moment that the -- that the employer was under no contractual obligation to make vacation pay payments and that he was not obligated to do so at all to anybody, would -- you would still certainly still be making the same argument?

Mr. Arnold Ordman: Yes, because --

Justice Byron R. White: What -- what would the remedy be before the Board then?

Mr. Arnold Ordman: I believe the remedy would be the same as it is here.

Justice Byron R. White: Which is what?

Mr. Arnold Ordman: In other words, the -- restoring -- restoring of -- giving the vacation payments to the employees on the same proposition that was given to the nonstrikers.

We believe, for example, a contract is set out.

There's no quarrel here that vacation benefits are a term and condition of employment.

And once they had been established by the contract, they would continue after the termination.

Justice Byron R. White: Well, I know but we didn't presume that it is so.

Mr. Arnold Ordman: And that under the contract, because it's a term and condition of employment which had -- which had -- once established by the contract, continues to exist and cannot be unilaterally changed.

Justice Byron R. White: Well, that --

Mr. Arnold Ordman: Any more of them for example --

Justice Byron R. White: Now, let's assume that it -- it -- say the employer have not made the vacation payments to anyone, and let's assume that no one could legally haven't had have -- have enforced the right to vacation payments?

Mr. Arnold Ordman: I think the Court, the Board would still reach the same conclusion.

For example, if he elected for the first time, with no background, if he elected to make vacation payments to employees who did not strike and withheld them from employees who did strike, then the discrimination would be apparent on its face even in that situation.

He may not --

Justice Byron R. White: Well, maybe the discrimination but how about the remedy?

Mr. Arnold Ordman: These, I suppose, within the Board's, the discretion, I suppose would be a matter whether to set things right.

It should be make payments to the employees, to the strikers, possibly withholding from the nonstrikers but I don't conceive the latter continues.

Justice Potter Stewart: But if he elected to make vacation payments to no one and which I understood from Mr. Justice White's question to be that is strikers or nonstrikers, you wouldn't possibly have an 8 (a) (3) violations.

You might --

Mr. Arnold Ordman: No, I think --

Justice Potter Stewart: -- under 301 for violation of --

Mr. Arnold Ordman: No, and I think there would be no 8 (a) (3) violations as I see it.

There may well, however, has been an 8 (a) (5) violation because this would be a unilateral change of a working condition and this Court has established the working conditions having been established by the contract even though the contract expired, the working conditions like the wages in hours would continue.

The employers would not unilaterally change them and if he did, it would be a violation of his bargaining application.

But it would not be an 8 (a) (3).

Justice Potter Stewart: It could be an action perhaps on the 301 too?

Mr. Arnold Ordman: Yes, it could be.

That could be an action under 301 under the contract.

Yes.

Now, we suggest therefore -- now, we are not saying that this is the end of thing.

The discriminatory intent is established, of course, by the nature of the conduct itself.

But this Court has suggested in Erie Resistor there are countervailing considerations; there could be a legitimate motive, a legitimate objective which would overweigh the discriminatory intent.

Now, without dwelling on it too much, I simply say that there are cases and we have cited some of these illustrative situations on page 12 of our brief where a legitimate business consideration can override the discriminatory intent which is inherent in the conduct.

But certainly, the company presented none as the Board below found.

And even assuming that the court as it did itself speculate as to what might have been the reason and it supplied this reasons, the company did not.

We suggest that even that -- even if that were proper, the speculative reasons the court below assigned don't carry the ball because this Board -- the Board did weigh these considerations and in its judgment under this Court whether that judgment is certainly subject to the review by the courts and by this Court.

But this Court has suggested that there must be a little circumspection attending court review of that judgment.

Now, we find nothing in American Ship which is inconsistent with Erie Resistor and we think to the extent this Court mentioned the Erie Resistor principle in American Ship and it did cite that case for we think it specifically indorsed Erie Resistor.

Now, the bulk of the respondent's argument here really is that the impact of vacation pay, this case is different from Erie Resistor because the impact of withholding vacation pay benefits even though a term and condition applied.

Justice Byron R. White: Were there some of these -- (Voice Overlap)

Mr. Arnold Ordman: Wasn't as -- excuse me.

Justice Byron R. White: Were there some of these employees who were refused vacation pay even though they were then working for the company?

Mr. Arnold Ordman: No, but apparently everybody was working for the company, did not go on strike, received vacation pay.

Now --

Justice Byron R. White: Well yes but they -- they drew a line at July 1st.

People who have been on strike but came back by July 1st, got the payment --

Mr. Arnold Ordman: Provided --

Justice Byron R. White: -- and not the people came back after that.

Mr. Arnold Ordman: That is correct.

People who came back after that did not get payments, did not get paid.

Justice Byron R. White: Although some employees on the job who did not get vacation payments at the time the payment was made.

Mr. Arnold Ordman: That is correct.

That is correct.

Now, the burden of respondent's argument really is that the impact of what the company did in this case was not as serious as the impact of super seniority in the Erie Resistor case and I think we might, without prejudice even make this concession.

But then, it is again a question of balancing because equally true that on the converse side, the employer in Erie Resistor would make and did make a very cogent case which this Court assumed that he simply couldn't stand business unless he gave that super seniority to offer that super seniority to replacements.

Now, as I say in this case, we think no serious business exigency to suggest except possibly the saving of money which would necessitate the action of the employer who took here in derogation of the right to strike which this Court has said carry some sort of special safeguard.

Justice Byron R. White: Yes, but if the employer honestly believe and then again assuming that he was not contractually bound to make any payments to anybody, and he -- since I'm not contracted to dominate any payments to anybody, you still get the same -- you still get the same inference if he decides, well, I will pay some vacation pay to somebody.

Mr. Arnold Ordman: That is right.

If -- if he -- if he has made in fact the mistake of law let's us assume this alright or whatever it -- if in law his action necessarily discriminates against strikers versus nonstrikers --

Justice Byron R. White: Well then, he would make --

Mr. Arnold Ordman: -- he must be taken to have intended this discriminatory effect.

Justice Byron R. White: You would make the same argument, I gather then, if there had been no contractual provision at all for vacation pay.

None at all.

The strike occurred, the people came back and at that time, he instituted the vacation plan and his plan and decided well.

This people -- if there are a lot of people then pretty worked last year without a vacation -- any vacation pay, I'm going to make some payments for last year.

And he paid the same people and didn't pay the same people.

Do you think he has got to go back and make vacation payments to people who are no longer on his payroll?

Mr. Arnold Ordman: Yes, if he initiates a term and condition of employment.

And it is a term and condition of employment, he cannot apply it discriminatory as between strikers and nonstrikers.

Then he has penalizing people for exercising their lawful right to strike.

Thank you, Your Honor.

Chief Justice Earl Warren: Mr. Bowden?

Argument of O. R. T. Bowden

Mr. O. R. T. Bowden: Mr. Chief Justice and may it please the Court.

I think it's important in this case to take a few moments to lay out may be a little more detail the background of the case so that we can see this, these facts as they actually existed at that time.

Now, this company had dealt with this union from a period of more than 20 years.

The record is devoid of any problems, any unfair labor practices and the only thing we can assume is that company and the union throughout these years had adjusted their problems among themselves.

In this case itself, there's no finding of any independent unfair labor practices to cloud the issue.

So we have in this case a sterile labor atmosphere other than this one incident and we have the laboratory conditions that the Board strives to get when they consider a case.

It's been our view, since this case originated, that this is a primarily a suit for money.

It stood by the Board as the improper forum to do this.

We urged from the beginning that if they felt that this vacation money was due to these employees that the proper forum was to the Section 301 of the Labor Management Relations Act which is set out for this purpose to test rights under contract.

Justice Byron R. White: I gather -- I gather in such a suit, you would deny liability for any vacation pay?

Mr. O. R. T. Bowden: It's -- it's -- we probably would, Your Honor but if there's a question and we recognize there's a question and we pointed this out to the union in our letter to them that since there was a question that we thought it was a matter which should be resolved through negotiation as to what those rights might be to try the one, answer the 301 suit and two, to not cause this action to arise and it may be well remembered that the union would not even discuss this matter at the bargaining table even though there were bargaining sessions being held throughout this period of time.

Justice Potter Stewart: To go and sue them.

Mr. O. R. T. Bowden: Yes sir.

Justice Potter Stewart: Excuse me.

Justice Byron R. White: Why did the employer then it wouldn't make these payments to some -- make payments to the others?

If they run this and the company honestly thought there was -- there were unde -- it was under no legal liability whatsoever to make payments to anybody of vacation pay and it wanted to save money or whatever the motivation was --

Mr. O. R. T. Bowden: Yes, sir.

Justice Byron R. White: -- why did it make any payments to anybody?

Mr. O. R. T. Bowden: Well, I think we're all from the premise that we pay it out in the contract.

It's always been our position that we made no payment for vacation under this contract.

The only vacation policy under which anyone got any vacation pay was that promulgated in August and only concerned employees of the plan at that time.

Justice Byron R. White: Yes, but you didn't make payments to all the employees.

Mr. O. R. T. Bowden: No, because of this qualifying which this plan adopted.

They had to be employees as of July 1st and if they were not employees after July 1st, they did not receive any vacation pay.

Justice Byron R. White: Yes, but that was -- you were making payments for prior years.

Mr. O. R. T. Bowden: Well, sir, it was not here -- here is the practical problem that you have in this such question.

You have a group of employees who went on a strike and a group who did not.

So, the union cancelled the contract under which there are certain vacation benefits that they had earned because of the service.

They met all the qualifications under the union contract and under the expired or cancelled contract.

So you drop to this time, we at this time was asking the union, let's negotiate about this matter and say who is entitled to vacation, who is not.

And the only thing --

Justice Potter Stewart: When -- I was going to ask you, Mr. Bowden.

Mr. O. R. T. Bowden: Yes, sir.

Justice Potter Stewart: When the strike was finally settled, when in December of the year, I think.

Mr. O. R. T. Bowden: Yes.

Justice Potter Stewart: And I suppose it was after the settlement there was a new collective bargaining agreement.

Am I right about that?

Mr. O. R. T. Bowden: No, sir.

Because during this period of time, and even before July 1st, the union had lost his majority status numerically and even though we continued to negotiate, there was a petition filed in December by the company and to determine whether the union still represented the employees and the union filed a disclaimer of any prior to that time.

Justice William J. Brennan: So there's no --

Mr. O. R. T. Bowden: There's none.

Justice William J. Brennan: There is no bargaining agreement anymore?

Mr. O. R. T. Bowden: That's correct.

Justice William J. Brennan: I see.

Mr. O. R. T. Bowden: Now, there's other --

Chief Justice Earl Warren: Well, I just wonder and if -- if they cancel the contract and at the time they cancelled it that there are wages due to them, you'd have to pay them as wages, wouldn't you?

Mr. O. R. T. Bowden: I would say, yes, Your Honor.

Chief Justice Earl Warren: Well, then there wouldn't be any question about it.

Mr. O. R. T. Bowden: That's correct.

Chief Justice Earl Warren: On -- now, on the other hand, they had worked -- worked according to their contract and had earned certain vacation rights at that time they terminated but why wouldn't they -- why wouldn't they be entitled to that also?

Mr. O. R. T. Bowden: Your Honor, the question was, had they qualified under the agreement, and this was the problem that we tried to get the union to the bargain table to discuss, this is the problem that we advised their attorney about by letter in July that there was a question in my mind where they had any rights under that agreement.

Chief Justice Earl Warren: Isn't that a question of law for the Labor Board to determine?

Mr. O. R. T. Bowden: No, sir.

They -- as my understanding, the Labor Board cannot -- is not in the business and were not set up to construe labor contracts, that Section 301 of the Act itself is set up to determine these problems.

Chief Justice Earl Warren: Suppose you haven't paid them their wages, would they have any relief for the Board?

Mr. O. R. T. Bowden: I don't think they would as an independent isolated matter, I'd say no.

But they had -- they could go in the state court, federal court and conceivably under Section 301 if there's a violation of the contract.

You have to understand, Your Honor, that here we have a contract cancelled on May 16 by the union.

It's our position that we had no agreement of any kind when they cancelled.

Now, the Board argued that they have some vested rights or interest but the cases go both ways.

This have much vested these rights have.

So we say and took position with the Board that these rights are not so fixed that we think there's some question to whether we are required to pay.

So from the period of May 16 until August the 15th, there was no vacation policy.

Now, during this period of time and the record show that by July the 1st, which was only six weeks after the strike started, over 75% of the employees who went on strike had been replaced.

Now, these employees had no reinstatement rights or they had no employee rights after that time.

And this was six weeks before the vacation plan was instituted.

Chief Justice Earl Warren: Let me just see if I understand you.

If these men went on strike at the time and they went on strike, you owe them wages that they have -- for work they had performed and you said, “Well, we're not going to pay you for those things but when it comes to bargaining, we'll take it up at the bargaining table.

Now, would they have any relief before the Board?

Is that an unfair labor practice --

Mr. O. R. T. Bowden: Your Honor --

Chief Justice Earl Warren: -- or isn't it?

Mr. O. R. T. Bowden: -- it's going to depend on what position of the party.

Well, let's say that they -- they said that --

Chief Justice Earl Warren: Well, let's take -- just take the position that I gave you.

That's a very simple thing and I don't want to complicate it than this is necessary.

In that simple situation, would they have any relief before the Board?

Mr. O. R. T. Bowden: I would say no.

Chief Justice Earl Warren: They'd have to go -- they'd have to sue under 301 and some other --

Mr. O. R. T. Bowden: They have the relief be that if they had to violate contract, they would have relief to the greatest procedure and the other function there.

I think that independent to that, they can bring a suit for these wages but this is where there's no question about them being due to wages.

And that is where our case is different to as a genuine dispute between the company and the union in this case that these people were entitled any vacation pay.

But I think again, we have to keep this in mind that by August the 1st --

Justice Byron R. White: You really mean it, the refusal to pay accrued wages --

Mr. O. R. T. Bowden: Yes.

Justice Byron R. White: -- because people were on strike, is not an unfair labor practice?

Mr. O. R. T. Bowden: Well, I don't know that that was the exact question.

Chief Justice Earl Warren: That was the exact question.

Yes, it was.

Mr. O. R. T. Bowden: Yes, sir and if you refuse to pay vacation wages to all or some.

Chief Justice Earl Warren: I was talking about wages.

I wasn't talking about vacation.

I was talking about wages at that time and exactly the way Justice White put it.

Mr. O. R. T. Bowden: Yes, but are you referring to, a refusal to pay any wages or part wages and part -- they did not pay?

Chief Justice Earl Warren: Well, I'm not sure aware.

Justice Byron R. White: All or any part.

All or any part of these wages that are accrued and payable and they refused -- then they refused because these men were on strike.

Mr. O. R. T. Bowden: I'm speaking now that when you say all or part, you mean that some of the striker or some of the employees received while some did not receive.

I think that in that case, there would be the basis for an unfair labor practice.

Justice Potter Stewart: Clearly, clearly if you refuse to pay because they were on strike, there would be an open and shut unfairly labor practice.

Mr. O. R. T. Bowden: That's right.

Justice Potter Stewart: But if you refuse to anybody his wages, that would simply be a breach of contract.

Mr. O. R. T. Bowden: That's correct.

Justice Potter Stewart: That's your point, wasn't it?

Mr. O. R. T. Bowden: I agree with you.

Now, before this, I think we have to take this a step further.

Now, before this vacation plan was instituted around the middle of August, 325 out of the 348 strikers had been replaced.

So you have a -- you have only 23 unrep -- have not been replaced at the time the vacation plan was instituted.

Now, how can the Board say that the institution of this vacation plan at this time called these people who had been replaced and had no re-employment rights to lose their interest in the union as they represented in this plan.

Now, keeping in mind too that this vacation plan unlike Erie did not attract anybody to leave the strike and join the company because it had a retroactive effective date, which mean that after they heard the plan and went to work, that they wouldn't be affected by the plan at all.

So this is not like Erie at all, the facts or situation of this case.

This is not made for the purpose of inducing people to break the strike.

They come in because they had already been replaced or returned prior to any effective time of the strike.

Now, vacation plans are not like super seniority plans.

This is an unusual -- the super seniority was unusual remedy that the company used.

Vacation plans were accepted and they were facet of employer-employee relationship whether you have a union or not.

So that all the company did in this instance was to put in the same vacation plan in August that they have offered the union and had been rejected by which the Board will concede we had a right to do with any, during the bargain, at any offer that we made the union in a way of a benefit, wage and hours that we have a right have a new bias and during the strike to institute those.

Now, let's assume that we had made 20-cent an hour increase.We could have put that into the nonstrikers until the replacements and this to me is this is just discriminatory against the strikers as such as this vacation plan.

Yet this is accepted and the Board will not use this as a basis of a discriminatory charge.

We've put in the charge plan, that's been offered, and the union rejected.

Justice Byron R. White: But at least you have had to give the increase to everybody who was back at work at that time?

Mr. O. R. T. Bowden: Yes, sir.

If they qualify it again under whatever this plan was.

Justice Abe Fortas: Were the nonstrikers paid on the basis of computation that would have been the same as -- that was the same as if it had been made under the contract?

Mr. O. R. T. Bowden: Yes, sir.

Yes, sir.

Justice Abe Fortas: So that what happened here is that the nonstrikers were paid on the basis of the contract formula or its equivalent and the strikers were not?

Mr. O. R. T. Bowden: Yes, sir, that's correct.

Alright, sir.

Now, the -- as been stated here, this matter was suggested to the union as a matter of the vacation pay on the expired contract or cancelled contract should be discussed and as the record shows, there is no record that the union ever discussed it or brought the matter up again.

Now, from the above, the Board found that we agree with the trial examiners that the denial of vacation pay to strikers who had not abandoned the strike by July 1st, 1963 unlawfully discriminate against them because of their errands to union strike.

Now, we're talking about they're making it as option in the face of a plan which did not come into effect for six weeks after this and at which time, more than 325 of the 348 strikers had been replaced and lawfully discharged.

So we say that this is -- there is no basis for this finding in the record.

The court below in considering this case noted that the Board had found that this vacation plan which is what had been offered to the union and rejected by them and then put it back in August of 1963 to be an ipso facto per se violation of the Act.

And frankly, gentlemen, the Court just couldn't buy that type of a situation.

The Court considered the respondent's conduct, carries with it an inference of an unlawful intention, so compelling that it is just fine to disbelieve what the company testified about this and the Court said we've looked at this case from the American Ship Building point of view and we just can't find it.

Now, the Court further said that when viewed in a strong evidence showing otherwise exemplary conduct on the part of the company, the argument fairing the inference of illegality becomes increasingly weaker.

And the Board still argued Erie Resistor.

As I pointed out, to me there's no factual basis by which these cases can be even argued together, Erie Resistor.

The plan was put in for the purpose of breaking a strike and it succeeded from the -- were found in the record in doing that.

As far as this case is concerned, the strike had been disposed off before the plan had been put in effect and it would not have affected anyone who came to work after the plan had been announced because there was retroactive.

Now, the desired position, and we still submit, that the findings of the Court of Appeals below is correct and that the findings to that court should be affirmed here on appeal.

Now, thank you very much.

Yes, sir.

Justice Byron R. White: I never did understand that why it was the company adopted this vacation plan?

Mr. O. R. T. Bowden: Well, the reason that they --

Justice Byron R. White: And I assume that there was no -- say no contractual obligation here.

Mr. O. R. T. Bowden: Yes.

Justice Byron R. White: At least that was your position and so the company decides to be what?

Mr. O. R. T. Bowden: Well, you have to remember and keep in mind that during this period of time, even though there was a strike in progress and there were replacements being made, there were negotiations.

Justice Byron R. White: Yes.

Mr. O. R. T. Bowden: There were certain offers by the company and certain offers by the union on the Board being negotiated.

We had for example a complete contract being negotiated.

These -- these concerned wages, hours and all other benefits that contract --

Justice Byron R. White: Even it was a good business policy to put in a vacation pay plan.

Mr. O. R. T. Bowden: Yes, this was a proposal and -- so this was put into effect because there were employees who were inquiring about it as a matter of some concern about who was going to get vacation pay and what the policy on vacation would be.

And as I said, the company, as I understand the law, has a right to put in any plan which has been previously offered by the union and rejected by them during negotiations when an impact has been reached.

And they call a strike as being prima facie evidence of an impact.

So we have a situation here where this offer had been made, had been rejected.

There was a problem about vacation.

They put in their plan as been offered to union and all of the employees who are always -- were under the plan adopted by the company received payments.

Justice Byron R. White: What was the purpose of adopting the July 1 cut-off for employees when the vacation pay was in the new plan and there actually lose payments for the year before?

Well, --

Justice Byron R. White: It's for the year before and a lot of people might have -- had worked the same period of time before which the vacation pay was made who didn't get the vacation pay.

Mr. O. R. T. Bowden: That's correct.

But --

Justice Byron R. White: So what was the purpose of adopting the July 1 --

Mr. O. R. T. Bowden: The July 1 date and this goes back in history, as we've pointed out, there have been negotiations and contract relationship between this union and this company for more than 20 years.

When I first saw this contract myself in reference to vacation, I inquired.

No one could tell me what the historical significance of the July 1 date was.

So because everyone understood it, it remained in the contract --

Justice Byron R. White: Well, has anybody figured out what it is yet?

Mr. O. R. T. Bowden: No, they have not but I think the only -- the only -- the only reason I see it for being there that someone in the negotiation period that in as much as that contract was expiring on May 16 that the fact that they had a subsequent -- they were receiving the money, might be some bargaining too later used to keep it from being kept.

Justice Byron R. White: For what period at time where the vacation payments made to those to whom they were made for the year prior to what date?

Mr. O. R. T. Bowden: For the year prior to July 1.

Justice Byron R. White: Or it wasn't for the year prior to May 16?

Mr. O. R. T. Bowden: No, for the year prior to July 1.

That used essentially the same vacation qualifications that it was understood by the employees or while as I said, it didn't make too much sense to me.

At least, they wouldn't seem to understand it but me and so I, couldn't go along with what they're feeling about it.

If there's no other question, I'll sit down.

Thank you.

Justice John M. Harlan: Just last question.

Do you -- what are the differences you see between here in effect this Court used in Erie and in effect you used here?

Mr. O. R. T. Bowden: The in here in effect here, Your Honor, in Erie Resistor, I think it's apparent what the company was trying to do.

It was trying to induce employees to go to work or induce replacement.

In this case, all of these that had already been accomplished before this plan was even announced.

There was only 23 employees out of the 348 who had not been replaced.

And when the plan was announced, it was so phrased so that if the other 23 who want to come back, they would not have enjoyed the benefits under it.

So the whole purpose of the two plans, I think is different.

Justice Potter Stewart: Here, there was a -- this plan could not, your point is, have possibly been an inducement to make striking employees return to work --

Mr. O. R. T. Bowden: Right.

Justice Potter Stewart: Because any who return to work after the announcement of this plan would not have received any benefits under it?

Mr. O. R. T. Bowden: That's correct.

Justice Potter Stewart: And that makes it different from Erie.

Mr. O. R. T. Bowden: Yes, sir.

Justice Potter Stewart: That's your point?

Justice Byron R. White: But the -- you were then negotiating with the union and there was a question on whether they even represented the majority.

Chief Justice Earl Warren: Mr. Ordman?

Rebuttal of Arnold Ordman

Mr. Arnold Ordman: Only two very brief comments.

I don't know whether inadvertently an impression might have been created that there was bargaining about this unilateral vacation plan.

The record is flat and the testimony by the -- in page 63 of the record by Harvey Granger, who was a plant manager, “Do you recall, Mr. Granger if vacation pay was ever discussed in the bargaining sessions with the union after the union that cancelled the contract?”

Answer, “It was not.”

The only other thing I might just touch briefly on the most recent question about --

Chief Justice Earl Warren: Would you speak a little louder please, Mr. Ordman?

Mr. Arnold Ordman: Yes, sir.

I want to touch just briefly on the last question about the effects.

I think I pointed out that we might get out prejudiced, concede that the impact in super seniority was not in the super seniority case probably greater than it is in this case but there certainly is in effect on the strikers or employees who are aware and will be aware in the future that if they -- unless they proffered their right to strike, they may be endangered in the future if they strike.

They might be endangered of losing benefits that would otherwise accrue to them if they didn't strike --

Justice Potter Stewart: That has to be your argument, the future effects, future strikes.

That has to be your argument Mr. --

Mr. Arnold Ordman: Yes, sir.

Justice Potter Stewart: And that does make it different from Erie Resistor not only in the --

Mr. Arnold Ordman: That's correct.

Justice Potter Stewart: Not only in the quantum of the -- of the -- of the favor to them shown by between super seniority and vacation pay.

But much more important is that we would have no immediate effect upon inducing these strikers to return.

Mr. Arnold Ordman: As we see this case in the balancing consideration that this Court talked about in the Erie Resistor, the weights on both sides --

Justice Potter Stewart: Yes.

Mr. Arnold Ordman: -- are correspondingly less but it must be viewed in that context.

Chief Justice Earl Warren: Very well.

Featured:

NLRB v. C & C Plywood Corp. - Oral Argument

Thu, 23 Aug 2012 18:15:26 +0000

Case:

NLRB v. C & C Plywood Corp.

Media File:

53_19661115-argument.mp3

Related Transcript:

53_19661115-argument

Transcript:

Argument of Friedman

Chief Justice Earl Warren: National Labor Relations Board petitioner versus C & C Plywood Corporation.

Mr. Friedman.

Mr. Friedman: Mr. Chief Justice and may have pleased the Court.

This case here on the read of certiorari to the Ninth Circuit presents a question related to the one that was before the Court yesterday in the Acme case.

Here, a union filed with the National Labor Relations Board a charge that an employer had failed to bargain in violation of Section 985 Act, because of certain unilateral changes in wages that the employer had made during the term of the contract.

The employer offered as a defense, that what he had done was sanctioned by the terms of the collective bargaining contract.

And the question presented in the case is whether in order to determine the unfair labor practice charge, the National Labor Relations Board has authority to interpret the collective bargaining agreement rather than as the Court of Appeals held, the board is required to re-meet the parties to a judicial lawsuit in order to have that issue determine because in this case, unlike the Acme case, the contract does not contain an arbitration provision.

The company is a manufacturer of plywood and the employees involved here are members of something called a ““glue spreader”” crew.

This is a group of employees who glues together the various pieces of the wood that combine to make the finished piece of plywood.

The crew ordinarily consists of four employees and these four employees have broken down into three different categories of workers.

The company ended into a collective bargaining agreement with the Union under which particular wages was set for each of these three different jobs in the “glue spreader” crew, rending from $2.15 to $2.29 an hour, and the contract also provided that during its term, the wages would be closed.

Paragraph 17 of the contract, which is a critical paragraphing above here and set forth at the bottom of page 67 of the record, after stating that the employer and the Union had agreed upon a classified wage scale which was incorporated in the contract went on to state that the employer reserves the right to pay a premium rate over and above the contractual classified wage rights to reward any particular employee for some special fitness, skill, aptitude or the like.

Three weeks after this contract had been signed, without consulting a bargaining with the Union, the company inaugurated what it called a premium pay plan for the “glue spreaders”.

That plan is set forth to page 73 of the record, and what it provided in essence was that whenever, in any particular one-week period, the glue crew, the four members, exceeded a certain production quota, each member of the crew was to get not the schedule rate in the contract that a higher amount of $2.15 an hour, every member of the crew was to get this.

It was not tied to the performance of any individual person.

The Union found out about this plan when a member of the Union brought a copy of the thing and the Union and the company then met on two occasions in which the Union protested that this proposed glue spreader plan was not justified under the terms of the collective bargaining agreement as the Union explained to the company in its view that this was not just a change in wages but a basic change in the method of computing wages.

It was not just giving a premium but involved a shift in computing wages from a straight alley basis to a production basis and therefore, in the Union's view is not justified by the contract.

The company on the other hand, contended that it was justified by the contract and refused to cancel the plan and then the Union filed a charge with the Board alleging that the company engaged in an unfair labor practice by instituting this plan.

Justice Byron R. White: Has the company ever claimed that this action would not have been an unfair labor practice even if there had been no premium pay provision on the contract?

Mr. Friedman: I don't believe so Mr. Justice that the whole controversy from the company's point of view has turned on their claim that under this provision of the contract, it was -- they were justified in what they did.

The -- at the full usual administrative proceedings, the Board held that in initiating this premium pay plan, the company had refused to bargain in violation of Section 8 (a)(5) and it entered an order in effect directing the company not to institute such a plan without first bargaining with the Union and if the Union were to request it to resend the particular plan that it had inaugurated.

The Board rejected the company's contention that it lacked jurisdiction to determine the unfair labor practice because in order to do so, it would have to interpret the terms of the contract.

Justice Byron R. White: So what would be the Government's position if these two parties in fact really agreed to permit the Government or permit the employer to raise wages whenever he wanted to?

Mr. Friedman: Well this would -- this Mr. Justice would present a difficult problem which I will come to the implication to this in a minute because our basic position in this case is that an employer cannot, without bargaining with the Union under Section 8 (a)(5) unilaterally change terms and conditions of employment.

Justice Byron R. White: It can't be that the Union agreed in advance to let them do it?

Mr. Friedman: Well, the Union has the right to waive rights under the contract and the question in that case would be, whether what was done was sufficient in all the circumstances to constitute a waiver.

There have been as was suggested yesterday's argument that the Board's power to deal with unfair labor practices under Section 10 (a) is not limited by any other existing remedy and the question would be whether in all the circumstances, the --

Justice Byron R. White: Well in this particular case, if a court or this Court found that this factual provision justified the plan that the employer -- covered the plan, that the employer actually put in, would the Government -- is that in the case as far as you are concerned?

Mr. Friedman: We don't think that is in the case Mr. Justice.

Justice Byron R. White: I thought that that's in the case?

Mr. Friedman: Is that end -- well the Board wouldn't think so.

I can't answer that question unequivocally.

Justice Byron R. White: That's the only issue that's here though.

Mr. Friedman: No, Mr. Justice.

We think that the real issue was whether the Board has the authority to interpret the contract that was --

Justice Byron R. White: I understand -- I understand that but let's assume that they do have the authority and they did it wrong and that the contract doesn't mean what the Board said it means and that the contract really permits this plan.

Mr. Friedman: Well, if --

Justice Byron R. White: And then -- then that's the end of the case as far as the Board's concerned.

Mr. Friedman: If -- if this Court would hold that this provision of the contract does not -- does permit this plan, I would seem that that would be the end of the case but what I'm suggesting Mr. Justice is --

Justice Byron R. White: Well, I know that's -- that's my question.

Mr. Friedman: And then I'm coming back a moment to what the Board held in this case.

It pointed out that it has frequently interpreted contracts in performing its functions under the Act and in this particular case, there was no proceeding had been invoked by the parties.

There was no pending arbitration proceeding either before a court or an arbitrator and therefore the reasons which sometimes lead the Board to defer to the tendency of another proceeding were not present here.

The Board then turned, went on an interpreted a particular contract and it concluded on the basis of its examination of the language of the contract and the negotiations between the parties that the purpose of this provision, this premium pay plan, was only to give the employer the right to make individual merit increases for the special competence of a particular employee but not to select a group of employees and unilaterally to change the basic method of compensating them from a straight time basis to a production basis.

And in reaching this conclusion, the Board concluded that what had been done by the Union in this case did not amount to a waiver on its part of the right to bargain about what it called a wage incentive system.

The Court of Appeals refused to enforce the Board's order.

It stated its problems, it said, since the existence or nonexistence of an unfair labor practice, does not turn entirely upon the provisions of the Act.

But arguably upon a good faith dispute as to the correct meaning of the provisions of the collective bargaining agreement, the Board had no jurisdiction to proceed because it said, whether or not this contract authorize what the company had done, was a matter to be decided by an arbitrator if there was an arbitration provision or if no such provision to be adjudicated by the Court.

Now, the answer I think we can fairly say that we and the respondent are in common ground on two general propositions.

First, that the Board has no general authority to enforce collective bargaining agreements.

And secondly, that the mere breach of a collective bargaining agreement of itself is not enough to create and give rise to an unfair labor practice.

Will we part company with the respondent in this case is when it argues that here, basically the unfair labor practice rest upon the breach of the contract.

We think that is not the basis here.

That here, the unfair labor practice rested on the company's failure to perform its duty to bargain with the employer -- with the Union before making any material changes in terms and conditions of employment.

I think the Board stated its philosophy of the decision in this case very well at the bottom page 96, where it said that in filing its unfair labor practice, the Union was complaining not of a violation of its contract with respondent but of the invasion of its statutory right as collective bargaining representative of employees in the unit to bargain about any changes in the terms and condition of employment for such employee.

So as we see the case here, basically, we think it involves three issues.

One, whether apart from the terms of the collective bargaining agreement, what the employer did here constituted is the refusal to bargain.

Two, whether the Board was authorized in itself interpreting the contract rather than leaving it to the parties to go to court, and three, whether in the fact to this case, the Board's interpretation of the contract was proper one.

Now I'd like the first turn of the threshold issue of refusal to bargain which as far as I can tell the respondent does not challenged here but since this is the keystone of the Board's decision, I think it's a accordant to deal with it briefly.

The duty with Section 8 (a)(5) imposes on an Employer and a Union to bargain collectively is defined in Section 8 (d) as the performance of the mutual obligation of the Employer and the Union to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment for a negotiation of any agreement or any question arising there under.

Justice Potter Stewart: Now, the employer here as I understand it says, “We did bargain.

We did bargain in good faith and we provided in our collective bargaining agreement for our liberty to do just what we did here.

And when you're asking us not to bargain about this, it's you, the Union who is in bad faith because we bargained about that and reach to an agreement.”

Mr. Friedman: Well that Mr. Justice, the Union -- it isn't that the Union is asking the Employer to bargain -- our position is that during the term of the collective bargaining agreement, if the employer attempts unilaterally without bargaining with the Union to make any substantial modifications in that thing, he cannot do it.

Justice Potter Stewart: Well of course, the employer's position is, I'm not making any modifications in the contract, I'm simply doing what I was permitted to do as a result of our previous collective bargaining.

Mr. Friedman: That's right, but that I would suggest Mr. Justice is a defense basically.

This is something you --

Justice Potter Stewart: Well, what I wonder what the point of collective bargaining is, if you can never reach a bargain that sticks.

Mr. Friedman: Well, you can Mr. Justice if they had reached the bargain.

But the question in the case is whether what the Union agreed to in this case, in effect gave the employer authority to make this kind of a change which the employer says he did have.

And we say that on the circumstances it did not authorize the employer to make a change.

But we further say that in deciding whether there has been a refusal to bargain here, the Board is authorized to examine the basis on which the employer purported to justify what he had done.

Now, this as was developed also during the argument in the preceding case the duty of the bargaining we think clearly is not limited just to working out the initial terms of the collective bargaining agreement that continues during the life of the contract.

Now, four years ago in the Katz case, this Court held that where during negotiations, an employer unilaterally and without consulting with the Union, made significant changes in the rights of pay in sick leave, that that constituted a refusal to bargain without regard to the employer's good faith.

And as I put it in so holding that such unilateral changes said, frustrates the objectives of Section 8(a)(5) much as does a flat refusal to negotiate at all.

And we think the same reasoning requires that during the term of a collective agreement, after the agreement has been added on into, similarly, neither side can make unilateral changes without conferring with the other.

The basic philosophy of the whole concept of requiring collective bargaining embodied in 8(a)(5), is that industrial peace will be furthered.

If the parties to a contract before making changes get together and talk about it, they don't have to reach agreement that's explicit in the statute.

But we think they do have to get together and talk about it and therefore, the philosophy of the statute is neither side can make significant changes in the basic employment relationship, the terms and conditions of employment without first considering, without first consulting and discussing it with the other side.

Now in this case, we think it's very clearly that the change that the employer made was a significant change.

Under the contract, does it previously existed --

Justice Byron R. White: Well, speaking of the Employer (Inaudible).

Mr. Friedman: Well, let me -- I'm going to have to answer your -- answer you Mr. Justice in two stages.

The order in this case, the only unfair labor practice found in this case was the refusal to bargain.

And of course, the whole -- I think the whole theory of it is, if the employer had said to the Union, “We now propose to institute this plan and if you'd like to discuss it, fine.”

In the course of the discussion, there may have been some changes.

The Union might have been able to talk the employer out of it.

Justice Byron R. White: Employer said (Inaudible)

Mr. Friedman: Well then it's --

Justice Byron R. White: They can't do it.

Mr. Friedman: Then it seems to me Mr. Justice -- then the employer has satisfied his duty under this order to bargain.

That's what --

Justice Byron R. White: (Inaudible)

Mr. Friedman: Pardon?

Justice Byron R. White: (Inaudible)

Mr. Friedman: In this case, what happened was, the employer without consulting with the Union inaugurated this plan.

Then they met after the plan had been inaugurated and the Union tried to get them to resend it and the employer said, “No, we think we are authorized by the contract.”

But it seems to me that there's a very great difference between bargaining between the parties before you do something and bargaining after it has been done and attempt to resend it.

Justice Byron R. White: But what happened after the (Inaudible)?

Mr. Friedman: That is correct under this case.

Now I have to in all candor state that since this decision, the Board has gone somewhat beyond the position has taken here, in the C and S case, which we sided into our brief -- the Board is going beyond this and they said that in this situation Section 8(d) of the Act, precludes the employer for making even a unilateral change after bargain, they construe Section 8(d) is saying that during the term of a contract, an employer has no right to modified in significant respect so that under that decision, a broader order would have been independent than in this case.

But in this case, the Board did not go that far and at the present time, quite frankly, the Board's thinking in this, on this subject is in a developing area.

But as far as this case is concerned, as far as this order is concerned, all of this order requires the company to do is to bargain with the employee -- with the Union before inaugurating this plan.

Now I like to come back to a minute to the significance of the change that was made here, because I think this is very critical.

Before this provision have been inaugurated, each member of this crew received a different wage with presumably reflected the varying skills, range from $2.14 or $2.15 to $2.29, and the record shows, this was one of the things that was very carefully put out in the negotiations.

Under this plan, the distinctions between the different members of the Union have been abandoned.

What happens is, once the “glue spreader” crew exceeds the production standard set here, every member gets $2.50.

The lowest paid man who used to get to $2.15 gets $2 and a half.

The highest paid man who used to get $2.29 gets $2 and a half.

If in fact, there's one man of this four-member crew who is inefficient, but despite that the other three members are so efficient that they can manage to achieve the production quota, they all four get the $2 and a half.

Now --

Justice Potter Stewart: This goes to, this goes to -- this argument goes to the merit so to speak, i.e. to whether or not this collective bargaining agreement permitted the employer to do what he did.

Mr. Friedman: This goes

Justice Potter Stewart: And those covered by the provision in the --

Mr. Friedman: This goes to the merit but also I was also tending to show that the change that was made here was a very significant change.

It wasn't just a minor adjustment.

It was a basic change in the way on which wage is calculated.

Justice Potter Stewart: Well, it doesn't it still go to the question of whether or not the employer on this collective bargaining agreement in that provision that permits him to pay premium pay, whether or not that provision covered what he did here.

Mr. Friedman: Yes, that's correct.

And this brings me Mr. Justice if may discuss that in the context of why we think the Board in this kind of a case does have authority to interpret the collective bargaining agreement.

I won't labor because it was discussed considerably yesterday the statutory language itself in Section 10 (a) which provides that the Board's power to deal with unfair labor practices should not be in any way affected by other means of adjustment or prevention established by agreement law or otherwise because it seems very clear to us that if the Board is not authorized to interpret a collective bargaining agreement, when it comes to pass on an unfair labor practice, its power to prevent such practices would be affected.

For one thing, it's just a matter of the time it takes.

The parties have to first go and institute a lawsuit.

It's bound to take a lot longer than the Board the proceeding.

Indeed the Court of Appeals itself recognized this but said, it didn't think that made any difference.

It's also significant we think that this proviso of the Section 10 (a) was part of the original Wagner Act and in the legislative history of the 1947 Labor Management Act, Congress consciously decided to retain this provision.

And in so doing, it stated that the remedies before the Board to deal with an unfair labor practice were intended to be in addition to and not in lieu of with other -- what other remedies might be available in another forum.

Justice William J. Brennan: Mr. Friedman, have we had occasion to interpret 10 (a)?

Mr. Friedman: 10 (a)?

Justice William J. Brennan: Here.

Have we in this Court had occasion in other cases that refer to 10 (a)?

I don't remember any.

Mr. Friedman: I don't remember any case on that Mr. Justice.

Now, coming to the -- Mr. Justice, I think I stand corrected.

In some of the preemption cases, I think the Court has talked about that proviso (Voice Overlap).

Justice Byron R. White: We talked about it in Smith, didn't we?

Mr. Friedman: I think so Mr. Justice and also I think in Carey-Westinghouse.

And I think that in both of those cases, the Court did indicate that the existence of the judicial remedy would not oust the Board of its jurisdiction.

Now, I'd like to also comment.

Therefore, it seems in the light of this that the Board should not be deemed to be precluded from dealing with this matter, unless to a very strong policy considerations which dictated in favor of giving exclusive authority in this area to the Court.

So we think the policy considerations, not only don't reached that result, but affirmatively support to the Board's jurisdiction.

Justice William J. Brennan: Did I understand you to say earlier Mr. Friedman in response to Justice White's question that if the Court interpreted this provision as the company interprets it, that this nevertheless was not preclude the Board from proceeding?

Mr. Friedman: That's correct.

As a matter of power -- as a matter of power, I don't think the Board --

Justice William J. Brennan: Do you remember that, it's not the Court, the same agency -- remember the Texas Gas Transmission case?

Mr. Friedman: No, I'm afraid I don't.

Justice William J. Brennan: Now, that was involved with Federal Power Commission in 363, where we held with the -- an interpretation of an agreement by the Federal Power Commission was not to be regarded as something within its expertise so called.

Now, the Courts are indeed better equipped to interpret the agreement by traditional principles in interpretation in our agencies.

And in consequence, the Federal Power Commission did not rely on the principle that the -- its interpretation came within that special expertise -- the deference expertise, of course sort of prior to give the agency.

Do we have anything like that involved in this case?

Mr. Friedman: Well, I would -- we'll allow to deference Mr. Justice, I would suggest that when we're dealing with this kind of a problem, the Board's expertise should be given great weight.

Let me see if I could explain that position to you.

Justice William J. Brennan: Now this is independently of the 10(a) argument --

Mr. Friedman: This is independently of the 10 (a) argument.

There is the fact of course that I don't know all the details of the Power Act.

So I don't believe if it's anything comparable.

Justice William J. Brennan: Well, I don't I recall that there was any comparable --

Mr. Friedman: I don't believe.

But in determining that the question, the ultimate question in terms of interpreting the contract, is whether when the Union agreed that the employer could have the right to pay a premium pay over and above the contractual classified rate to award any employee.

The question in that instance is whether this authorized them to inaugurate a plan covering groups of employees, changing the basis or merely to single out a particular employee and say, “You employee Brown, you are very skilled.

We're going to pay you not $2.25 but $2.40.”

As I might add, there was an instance, there was one employee that the record shows, but why at the time of this -- time for this negotiation was being paid the premium rate.

He was getting $2.40 although the contract was $2.29.

Now, we would suggest that in answering that question, it's not enough just to look at the particular terms of the contract when what you're trying to find out is whether in doing this thing, the employer has violated his duty to bargain.

Because the whole question it seems to us is so intertwined with the subject of collective bargaining with the Federal Labor Policy.

That to answer this question calls to something more than just the kind of analysis that a court would traditionally make in interpreting the contract.

They come into play -- it comes into play for example, the well-settled rule under the National Labor Relations Act that the courts have repeatedly upheld, that a waiver of statutory rights will not be implied unless it is clearly and unquestionably set forth.

Now, we have here a history of bargaining negotiations between the Employer and the Union.

And in the course of these negotiations on one or two occasions, some reference was made to the employer considering the inauguration of a premium paid plan for the “glue spreader” crew.

There's nothing -- and one of the instance the Union said, nothing on the other instance when the employer referred to the fact that another company in the area had proposed such a plan but had withdrawn it when that Union objected, the Union representative said they couldn't agree to such a thing.

Justice Abe Fortas: Mr. Friedman, how would you state the principle for which your contending here that is to say you've told us that you don't contend that the Board has general power to interpret collective bargaining agreements.

Mr. Friedman: That's correct.

Justice Abe Fortas: On the other hand, the Board does have the power with respect to unfair labor practices.

Now, how do you -- how would you formulate a bridge between those two principles?

Mr. Friedman: Well, I would say Mr. Justice that where it is necessary to interpret a collective bargaining agreement, in order to ascertain whether there has been an unfair labor practice.

The Board in carrying out its statutory duties to determine unfair labor practices made to that extent interprets the contract.

Justice Abe Fortas: And I suppose you can add to that assuming always that the mere violation of the collective bargaining agreement is not an unfair labor practice.

Mr. Friedman: That's right.

There may be many situations where the violation of a collective bargaining agreement will give rise both to a possible action of breach of contract and to an unfair labor practice.

And of course the Board -- this is not the only area where the Board has to interpret collective bargaining agreements that --

Justice Abe Fortas: So they find now whether the Board has power in the particular circumstances to interpret a collective bargaining agreement, you've got to find out -- you've got to go to the end of the process and say, “How did it interpret it for a work purpose and with work consequences?”

Mr. Friedman: That is -- I think that is correct Mr. Justice.

And as I say, that the Board for example, that there are certain portions of the statute where the mere entering into of a particular type of collective bargaining agreement is unfair labor practice.

Such as entering to a hot cargo bringing all aboard there, it's never been suggested to our knowledge that when it's charged to the particular contract is a violation of the hot cargo provision, that it's necessary for the Board to defer.

Similarly when on the Board has to determine a dispute -- a representation dispute on the 10(a), it traditionally interprets the provisions of the collective bargaining agreement.

Justice Byron R. White: Well, Mr. Friedman, to the extent that you feel that the contract interpretation issue where unfair labor practice really invokes the expertise of the Board.

I would think that -- then you're almost saying that the Board's interpretation is pretty close to final and that the Court shouldn't to disturb it.

And also I would think that the -- if somebody happen to come into a 301 suits.

Let's assume the employer sued on the provision and the Labor Union said, “No, you can't sue at all.

You'd better go to the Board.

This is one of those things where the Board's expertise is critical.”

At least they'd say that if it's critical or you say it is, in this case.

Mr. Friedman: Well I think --

Justice Byron R. White: Why wouldn't there be a primary jurisdiction then in 301 suits where the contract division overlaps an unfair labor practice --

Mr. Friedman: I think there Mr. Justice we would say that the Congress in an act in 301 intended to open up broadly the federal courts and this Court's decisions I think in the preemption case have indicated that this --

Justice Byron R. White: Well then Congress doesn't -- must not feel a labor expertise is so critical.

Mr. Friedman: Well the Congress --

Justice Byron R. White: Contracts?

Mr. Friedman: -- Congress in those situations Mr. Justice I suggest was not addressing itself to the problem of the Board's authority to remedy unfair labor practice as it was addressing itself to the question of what remedy is the best --

Justice Byron R. White: That's a different question.

We're not talking about the Board's authority.

We're talking about the effect of the Board's action in interpreting contract whether how much deference you must pay to it.

Mr. Friedman: Well, I would think in this situation the Board's interpretation should be given very substantial deference by the Court of Appeals.

Justice Byron R. White: Well, I'm just saying that if you do, if that's the Government's position, you really should say that Smith against Evening News Association should be overruled.

Mr. Friedman: No, we support in fact the Government urge --

Justice Byron R. White: Well I know, and I know -- I just don't understand how your position here is consistent with the position you took there.

Mr. Friedman: Well I think -- I think Mr. Justice, it's consistent because there are different problems it seems to me.

In the 301 suit, in the 301 suit --

Justice Byron R. White: I remember, we're not talking about the questions of power.

Either the -- under 301, under the Board's authority or either one can -- I mean the Board can go ahead and take of its unfair labor practice and the Court can give a remedy for breach of contract in the 301.

But the real question is, if the Board is so expertise that its opinion should overwrite that of court.

And the Court, the Court gives a remedy on 301 and other referent to the Board.

Mr. Friedman: Well I would -- perhaps Mr. Justice, what I was trying to suggest was that in the 301 suit the issue is framed in the Court ordinarily in a much narrower context than before the Board.

I was suggesting, the Board's expertise is important in this area because the question of contract instruction in an unfair labor practice proceeding is tied in with the question of statutory violation whereas in the 301 suit, it's ordinarily only the question contract interpretation.

Justice Byron R. White: Was this the breach of contract?

Mr. Friedman: I would think it may have been.

I would think it probably was.

Justice Byron R. White: Well, the Union sort of -- you think the Union -- let's just assume the Union hadn't gone to the Board but it's on the Court sued under 301, for breach of contract to enforce a contract.

Now if you think the Board's opinion is so critical, I would have think the employer could have send one out, let's just hold up that the Court will give the opinion on the Board.

Mr. Friedman: Well, but Mr. Justice if I may come back in such a suit by the Union, the only question would be whether or not the contract authorizes, who wouldn't get to the -- any questions as to whether the question of suggestion go way with the statutory rights, you wouldn't have to get-in in the 301 suit to the problem of whether there was a refusal to bargain.

Whereas it seems to me the Board's expertise comes into play in evaluating the contract in the light of the statutory policies reflected in the Labor Act.

Chief Justice Earl Warren: Mr. Tichy.

Argument of George J. Tichy

Mr. George J. Tichy: Mr. Chief Justice, may it please this Honorable Court.

Irrespective of how it is said, the issue here is a very simple one.

That issue is, does the National Labor Relations Board have the right and jurisdiction to adjudicate an unfair labor practice when it sole and only basis for doing so is to interpret and construe the collective bargaining agreement of the parties?

We are convinced it does not have that right.

Counsel for the Solicitor General has pointed out the pertinent provision of the contract upon which the employer relied throughout these proceedings.

Namely, the contract after setting forth a classified wage scale went on and stated, “To the employer reserves the right to pay a premium pay over and above the contractual classified wage rate -- excuse me, to reward any particular employee for some especial skill, fitness skill aptitude and the like.”

This is the provision of the contract upon which the employer relied and upon which the Board placed its most unusual interpretation.

Justice John M. Harlan: (Inaudible)

Mr. George J. Tichy: I would think not, and to this point if I may have the indulgence of the Court.

The Board argument inherently implies that all matter is not agreed upon in bargaining, remain subject to bargaining before a change is permitted.

We do not subscribe to that argument.

We believe that this -- as this Court stated in the Warrior & Gulf decision, the collective bargaining agreement is more than a contract.

It is a generalized “to govern a myriad of cases, which the draftsman cannot wholly anticipate.”

To continue this Court through Justice Douglas stated, “Collective bargaining agreements regulate or restrict the exercise of management functions.

They do not oust management from the performance of them.

Management hires and fires, pays and promotes, supervises and plans, all of these are a part of its function.

And absent a collective bargaining agreement, it may be exercised freely as limited by public law and by the willingness of employees to work under the particular unilaterally imposed conditions.

A collective bargaining agreement may treat only with certain specific practices leaving the rest to management, but subject to the possibility of a work stoppage or work stoppages” and that conclude the quote.

It is our view that this residual management rights are totally ignored in the Board's concept that's presented here.

This concept also is overwhelmingly accepted by the labor arbitrators in the labor arbitration practice.

The American Bar Association Labor Relation section devoted a part three as I recall of its discussion on labor arbitration to this very point.

While there was an effective, but I would say a minority dissent, it is clear that the large bulk of the section and the -- those on the committee and of arbitrators do feel that these residual rights do exist just as Justice Douglas pointed out in this case.

Did I answer your question sir?

Justice John M. Harlan: (Inaudible)

Mr. George J. Tichy: The Board's authority is statutory.

Without the statute, there is no Board.

The authority given the Board under that statute while broad is not limitless.

Here, the Board seeks to exercise the authority to administer and interpret a labor contract under a refusal to bargain unfair labor practice.

Yet neither the language of the statute nor the legislative history authorizes this.

The language of the refusal to bargain unfair labor practice was the same in the original Wagner Act passed in 1935 as it is now.

In 1946 and 1947, Congress was very concerned with the usurpation of authority by the Board under this particular provision.

And we add at no time in that period, prior to 1946 and 1947, had the Board gone as far as it has gone in this case.

Attention is directed to the respondents brief at page 38, footnote 21.

There, we have a very cryptic analysis of the House Committee on Education and Labor in which that committee pointed out, “Unless Congress rights into the law guides for the Board to follow, the Board may attempt to carry this process still further to seek to control more and more of the terms of collective bargaining agreements.”

As a consequence, Congress did not leave it to the Board to make this determination and in Section 8(d) chose to define the terms to bargain collectively.

In doing so, it is our belief that what Congress sought to do was to create an atmosphere under which collective bargaining could thrive, not to determine the terms of the agreement itself.

The clause or the section itself points out that the obligation to bargain should not compel either party to agree to a proposal or require the making of a concession.

Congress also went out -- went on at great lengths to spell out the rights and the duties involved.

The legislative history of this statute shows that the Senate in 1947, in the Bill it passed provided that the violation of a collective bargaining agreement would be an unfair labor practice.

But when the Bill got into conference, the House is not having a comparable provision prevailed and that portion of the legislation was dropped.

It is clear that the refusal to bargain unfair labor practice was not intended to encompass contract administration as is further evidenced by the remarks of the manager of the Senate Conferees, the late Senator Robert Taft which is quoted in our respondents brief at pages 49 and 50.

He knows it that while the Senate Conferees yielded on the elimination of the violation of contract, unfair labor practice.

They retained their other amendment which was new to the Act namely Section 301, which authorizes federal court jurisdiction and labor contract controversy.

He concluded, “If both provisions had remained,” that is both the violation of contract unfair labor practice and Section 301, “there would have been a probable conflict of remedies and decisions.”

That is -- thus, it is clear that Congress did not concede that there would be a conflict of remedies and decisions by leaving in the refusal to bargain unfair labor practice, at the same time that Section 301 was enacted.

Justice Abe Fortas: Mr. Tichy may I ask you a question, I mean two questions.

Suppose this contract did not have under such provision in it, with respect to the employer's right increase in wages, and suppose the employer did what it did in this case, would the -- would the Board have jurisdiction that adjudicated unfair labor practice?

Mr. George J. Tichy: In response to the other justices' question, this was the point I was hoping that I had covered and I'm happy that you ask the question because --

Justice Abe Fortas: I'm -- I'm very sorry.

Mr. George J. Tichy: No, no, no.

Justice Abe Fortas: I didn't understand it.

Could you answer me briefly.

Mr. George J. Tichy: I find that my communication sometimes is not good and I'm glad that you have asked the question.

The concept as we view it is that --

Justice Abe Fortas: I just want a brief answer to my question.

Mr. George J. Tichy: Well management has the right -- no, there shouldn't have been unfair labor practice, I apologize.

Justice Abe Fortas: The Board would not have jurisdiction.

Mr. George J. Tichy: I would say the Board would not have jurisdiction unless, in the course of this situation, the employer had engaged in other aspects common to unfair labor practices, anti-unanimous, bad faith --

Justice Abe Fortas: Come on let's get back to my question, just very simply.

Let's suppose there were no contract provision here, such as you're relying on that is to say no provision enabling the employer to increase wage rates for an individual or a group.

Is that much of my question clear?

Mr. George J. Tichy: Yes, sir.

Justice Abe Fortas: And let us suppose that the employer did precisely what your client did in this case.

Is that clear?

Mr. George J. Tichy: Yes, sir.

Justice Abe Fortas: Now my question to you is this.

On your theory, when the Board, the National Labor Relations Board have jurisdiction to adjudicate a complaint filed by the Union charging an unfair labor practice?

Mr. George J. Tichy: I would say not.

Justice Abe Fortas: Alright.

Mr. George J. Tichy: Under the Warrior & Gulf decision.

Justice Abe Fortas: You would say that even there, so you don't depend upon the existence of the contract provision?

Mr. George J. Tichy: In this case, I depend upon it because I feel that it is an essential part of the facts but I believe stepping one side -- one step away from this case in response to your question.

No, I don't believe unfair labor practice exists in that.

Justice Abe Fortas: Well I'm not asking whether it exist, I'm asking whether the Board would have jurisdiction.

And what you're telling me now is that even though the -- I would assume that the situation and that put to you, it would not turn upon an interpretation of the collective bargaining agreement.

Mr. George J. Tichy: And this is where I believe is Warrior & Gulf decision applies, that they wouldn't have jurisdiction because all that a collective bargaining agreement seeks to do is to govern management.

That is one of the elements, substantial elements.

Justice Abe Fortas: So your theory is that once collective bargaining agreement has been entered into that -- whatever the employer does with respect to wages cannot constitute an unfair labor practice.

Mr. George J. Tichy: No.

We can find alternates to that where the necessity to bargain I think would be a part of it.

Let us assume for the moment a new job, one that had never existed before, for which no rate had been set or negotiated.

I believe that there -- the employer has the responsibility of negotiating the rate of that job with the Union.

Justice Abe Fortas: Well if I correctly understand you, that you are saying is that once a collective bargaining agreement has been reached, an employer has the right to change to increase wages and a no circumstances where the Board had jurisdiction to entertain a complaint at the particular increase in wages constitutes an unfair labor practice.

Mr. George J. Tichy: I wouldn't like to say under no circumstances.

But at the moment, I would say that the answer to your question is yes.

They would not have that right as I view the present posture of the labor law although I acknowledge the fact that there is a dissent to that view.

Finally, the conference report of which was the outgrowth of the Senate and the House deliberations in the passage of the Taft-Hartley Act conclusively buttresses the respondent's contention here when it concludes with this language and “Once party's have made a collective bargaining contract, the enforcement of that contract should be left to the usual process of the law.”

And I would like to add because I feel that this is an essential and a very important part of this quote.

They continued, “And not to the National Labor Relations Board.”

The conclusion that Congress did not intend that the Board should have the right to interpret construe and force or administer labor contract either indirectly or directly is also evidenced by the fact the 73rd Congress in 1934, the Congress immediately preceding the 74th which in 1935 passed the Wagner Act, amended the Railway Labor Act establishing the National Railroad Adjustment Board.

In that Legislation, Congress spelled out that the National Railroad Adjustment Board was to have jurisdiction to resolve the speech between employees, unions and carriers growing out of grievances or out of the interpretation or application of railroad labor agreements.

If Congress had intended that the National Labor Relations Board surely involve itself in the administration of labor contract, it certainly had the skill and the precedent on how to write such a statute.

Since Congress did not choose to apply even remotely the language used to establish the jurisdiction of the National Railroad Adjustment Board to the National Labor Relations Board, it is conclusive that Congress did not intend that the National Labor Relations Board should exercise the authority that it search here.

The refusal to bargain unfair labor practice has been stated in the same language from the inception of this legislation.

Yet, in well over 25 years, through ever changing personnel of different political motivations, no effort was made by the Board to assert itself in a situation such as this until 1964.

And the decisions of the Courts in all Circuits to date, so far as I can find, are in complete harmony with the viewpoint that prevailed in the Board prior to 1964.

There can be no question.

The employer's conduct here was in complete good faith.

There is absolutely no showing of anti-unionanimous.

The interpretation made by the employer was reasonable and a study of the situation involved will show that it was completely proper and tenable.

Assuming for the moment that the Union was entitled to relive, it had many alternates that is available to it.

One, it could have gone to a federal part under 301.

It could have gone secondly under -- to the State Court for a contract violation on --

Justice Byron R. White: What would the Union in Court in this situation?

Mr. George J. Tichy: Well, it would seem to me that each position would be that the company violated the provision -- provisions of its contract.

Justice Byron R. White: I know it would be planning although -- the employer violated the agreement by paying too much?

Mr. George J. Tichy: Yes, correct.

That's correct.

It would say that the employer exercised in authority that it did not have under the contract.

Justice Byron R. White: So that it couldn't get damages I don't suppose.

Mr. George J. Tichy: I don't see what the element of damages would be unless of course the -- there would be some inference here that the Union's integrity and reputation --

Justice Byron R. White: So what the -- so is this really very effective remedy going to the Court that you're talking about?

Mr. George J. Tichy: I would say yes.

I've --

Justice Byron R. White: Can't get anything, but you got to go.

Mr. George J. Tichy: Well, it would at least settle this question as it would appear Congress intended that the party should settle disputes between them over contract interpretations.

Justice Byron R. White: So the -- so the Court will say after the Court agreed with the -- agreed with the Union.

Then I supposed it's an injunction?

Mr. George J. Tichy: Yes, I would assume that either specific performance or an injunction might lie, which would get the result that they would be -- which the Union would be seeking.

Justice William J. Brennan: But it seems you haven't mentioned the Section 10 (a) yet.

Mr. George J. Tichy: Actually, it is our belief that Sec --

Justice William J. Brennan: That -- that's also been in the statute since the Wagner Act.

Mr. George J. Tichy: That's correct.

However into the Wag --

Justice William J. Brennan: And that does say that the Board has certain power irrespective of any agreement so forth.

Mr. George J. Tichy: Provided an unfair labor practice exist.

In other words, the Board's powers are very --

Justice William J. Brennan: That's the very issue, isn't it?

Mr. George J. Tichy: Yes.

And of course we're -- our argument here is that no unfair labor practice does exist.

Justice William J. Brennan: Well, that's your position, it's not the Board.

Mr. George J. Tichy: No the Board --

Justice William J. Brennan: But 10(a) -- 10(a) certainly contemplates, it does it?

That the Board shall have certain power to deal with situations like this irrespective of the existence of a collective bargaining agreement, does it?

Mr. George J. Tichy: It con't -- yes.

It -- but you say such as this and this is where unfortunately, I must part company.

The 10(a) is explicit in give --

Justice William J. Brennan: But my point is, surely 10 (a) contemplates that even when a collective bargaining agreement has been breached, that there may be unfair labor practices.

Mr. George J. Tichy: True, however --

Justice William J. Brennan: Notwithstanding the existence of agreement.

But why does it dismiss that case?

Mr. George J. Tichy: Because the Board must first as a threshold matter interpret the contract and we believe that the legislative history is replete with the clear intent of Congress.

That this was not what Congress contemplated the Board should engage in.

As a matter of fact, the record is also complete or replete with the concept of the Congress did want compulsory arbitration.

And actually as I see this case, assuming that the Court should unfortunately decided against me, we've made one gigantic step off into compulsory arbitration.

Why?

Because every contract contains in one form or another, some control over a management right or even a union right so that a brief party can run to the Board.

The Board makes an interpretation and here we have our -- a compulsory arbitration and as you observe in this, our own --

Justice Byron R. White: Yeah, but that's been inherent in making a contract as people starting making contract except that -- instead of running to a board, they come to court.

Mr. George J. Tichy: Accepting that it --

Justice Byron R. White: And you call that compulsory arbitration, with some judge.

Mr. George J. Tichy: In a sense it is, excepting that here, the statutory intent was that the Board should not engage in this activity.

But it should go to a court.

We get to this matter of the Board expertise and it's clear that Congress in 1947 didn't believe that this expertise existed.

And we also get to the case of Dowd Box Company versus Courtney in which this Court articulated which the principles I believe that are applicable in this case.

At page 513 of that case, the Court clearly delineated the authority of the Board.

It was pointed out that while Congress confided primarily interpretation and application of the statutory rules to the Board, it rejected that policy with respect to violations of collective bargaining agreements.

Instead, the Court concluded and I “Congress deliberately chose to lead the enforcement of collective agreement to the usual processes of the law.”

The other alternatives that were available to the Union as I view it, although there may be some question as to which one of thee you may believe to be a more effective than another, they could have gone to State Court as the second alternative.

The third alternative, they could have gone to the Federal Mediation and Conciliation Service sought their intervention in this matter.

And the Federal Mediation and Conciliation Service, I might say from personal experience is a very effective organization.

They could have sought as the fourth alternative, the State Mediation facilities.

The fifth matter which is not formed to a timber products industry of the great Northwest is arbitration on an ad hoc basis.

Sixth, they could have press their point further in collective bargaining under the grievance procedure.

Or lastly as I viewed this matter, they could have waited to the next or to the end of the term of the contract.

And said now, “Looking here Mr. Employer, we didn't like mean what we said back there and requested the appropriate revision in the collective bargaining agreement.

Justice Byron R. White: Mr. Tichy what would be your position if there's an arbitration clause in this contract, was it broad enough to cover this kind of -- that precisely at this dispute?

Mr. George J. Tichy: We would have believed that the arbitration clause should have been pursued and this matter submitted to an arbitration board.

Justice Byron R. White: And no court action.

Mr. George J. Tichy: No, no court action under your trilogy, yes.

No court action, I should have thought.

The Board argument runs that it is entitled to construe the provisions of a labor contract when such construction is necessary to vindicate statutory unfair labor practices when we realized that almost every provision of a labor contract in one sense or another governs, wages outs in working conditions, we can see that the Board can reason its way into almost every dispute over an interpretation of a contract.

It can weigh the respective interpretations and if the construction that it chooses, it is an unfair labor practice, then in their opinion then they can find that an unfair labor practice exists.

As we view it and we pointed out in our brief some appropriate statistics, the Board claims it is overburdened now.

Its trial examiners admit that it is overburdened now.

To open wide the doors that this case would open wide simply would add to the burden of the Board.

One last point, we also feel that industrial stability will result from the Board's unwarranted invasion of contract administration.

The Board is now saying that an employer's action which if the Board determines, he's not allowed by a labor agreement.

That is a contract violation.

Constitutes an 8 (a)(5) or a refusal to bargain unfair labor practice.

In the Ma -- in the Mastro Plastics case this Court held at most “no strike” clauses do not bar a strike which is occasioned by an employer's unfair labor practices.

Any claim of violation, employer violation of a labor agreement, that is any grievance, may thus justify the Union to legally strike in spite of a no strike clause.

This, we believe, will only create chaos not stability in the -- American industrial scene.

To permit the bar to interpret contracts under circumstances such as exists here, clearly circumvents the language of the statute and the manifest congressional intent.

The Board should not be permitted to indirectly accomplish a purpose which has no direct authorization in the Act.

To grant the Board request, we believe, is tantamount to poisoning compulsory arbitration upon American industry when Congress made it very clear that it did not approved of compulsory arbitration of the settlement of labor disputes.

It is respectfully submitted that the decision of the Court of Appeals in this matter was correct.

Thank you.

Featured:

Labor Board v. Erie Resistor Corp. - Oral Argument, Part 1

Tue, 25 Sep 2012 22:34:33 +0000

Case:

Labor Board v. Erie Resistor Corp.

Media File:

288_19630218-argument-1

Related Transcript:

288_19630218-argument-1

Transcript:

Argument of Norton J. Come

Chief Justice Earl Warren: Number 288, National Labor Relations Board, Petitioner, versus Erie Resistor Corporation et al.

Mr. Come.

Mr. Norton J. Come: Mr. Chief Justice, may it please the Court.

This case is here on certiorari to the Third Circuit, which denied enforcement of the Board's order against the respondent, Erie Resistor, a manufacturer of electrical components and plastics in Pennsylvania.

The Board found that Erie violated the National Labor Relations Act by awarding in the course of an economic strike, 20 years additional seniority to replacements for strikers and also to strikers who return to work during the strike.

So that in a subsequent layoff, strikers who did not return to work until after the strike terminated were laid off as junior employees.

And the question presented in this case is whether the grant of a seniority advantage to employees who go to work during a strike was the concomitant reduction in the seniority's standing of those strikers who elect to remain out on a strike, discriminates an employment and restrains and coerces the exercise of the right to strike in violation of Sections 8 (a) (1) and (3) of the National Labor Relations Act.

Now the underlying facts that give rise to this problem are these: On March 31, 1959, Local 613 of the International Union of Electrical Workers, the certified representative of the company's production and maintenance employees called a strike when the parties were unable to agree upon the terms of a new contract.

The strike was joined by all of the approximately 478 employees working in the unit.

In addition at that time, there were about 450 employees in the unit or in a layoff status.

Throughout April, the Company operated on a reduced basis by transferring about 140 clerical and nonunit employees to the production and maintenance unit.

On May 3rd, however, the Company notified all members of the Union by a letter that it intended to hire replacements and its strikers would retain their jobs until replaced.

In accordance with that --

Justice William J. Brennan: (Inaudible)

Mr. Norton J. Come: No, Your Honor.

Under Mackay, which I'll come to in greater detail, the Company had a right to do that, to replace the strikers.

In accordance with this notice, the Company began to hire replacements.

It picked up one new hire and 23 from the layoff status.

It assured them after they were accepted for employment, that they would not be discharged or laid off upon settlement of the strike.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Well, it depends upon what we mean by that which I would like to get to when I get to the discussion of the Mackay case.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Justice Potter Stewart: Does the evidence show that they wouldn't have been able to hire these people without making such assurances to them?

They wouldn't be laid off as soon as the strike is over?

Justice William O. Douglas: 365?

Mr. Norton J. Come: The trial examiner found that the employer was motivated by economic considerations in making this offer.

Justice Potter Stewart: Can't you give a little more precise answer than that?

Mr. Norton J. Come: Well, the record does not clearly show that -- it does not show that they could not get these employees without making this offer to them because as a matter of fact, the town of Erie at this time happened to be one of deprived -- depressed unemployment.

There were 300 applications that the Company had from new employees that they hadn't acted upon.

Justice William J. Brennan: Well, would --

Mr. Norton J. Come: So --

Justice William J. Brennan: -- the Board think this was a different case if the record did show that it could not have hired without making this offer?

Mr. Norton J. Come: No, Your Honor.

In the Board's view of this case, I've merely indicated that the trial examiner had found that the Company was economically motivated.

In the Board's view, this type of a super-seniority arrangement is violative of the statute irrespective of the employer's good motive for the action.

Justice Potter Stewart: Is it in the Board's view violated the statute irrespective whether only new employees are involved or whether as in this case, it involved both new employees and employees out on strike?

Mr. Norton J. Come: I believe it is, Your Honor.

The reason I say I believe is that the Board has yet -- has never had a case where it has been offered only to new employees and as I'd like to develop later, I think it's a practical matter if it would be impossible to have such as it sounds.

Because if you're going to have some old employees that are going to go to work as you're likely to have, it would be impossible not to -- not to extend the benefit to them.

As a matter of fact, that has been the case in every one of the cases that we've had so far.

Now, on a bargaining session held on May 11th, the Company told the union that it was promising replacements job security and that in order to implement this promise, it would be necessary to accord them some form of super-seniority.

Now, you had about five bargaining sessions that were held between May 11th and May 28th.

The Company proposed several alternative forms of super-seniority offering to negotiate the precise nature of it, but insisting in each case that it had to have super-seniority in some form.

The management people --

Justice Potter Stewart: It didn't use that word, I presume, did it?

The management didn't use that word, that word that you put (Inaudible), “super-seniority”.

It simply said, it had to have some provision to see to it that these people would be more than temporary employees --

Mr. Norton J. Come: No, Your Honor.

Justice Potter Stewart: -- isn't it?

Mr. Norton J. Come: I think that the testimony in the record shows that they did use that word.

We take page 120 of the record, which is the testimony of Gordon Farrell, the Company's Industrial Relations Director, and 128 of the record.

And he states that we would -- talking about on May 11th, that we would have to accord them some sort of super-seniority.

And then when we get down to the meeting on May 28th, he gets more specific and points out that the -- it looked as though the super-seniority would have to be in the neighborhood of 20 years.

So that I think it is quite clear from the (Inaudible) -- from the record that the company officials themselves characterized this thing as super-seniority, but whatever it was characterized as, it was quite clear that the arrangement that they had in mind was an arrangement that would give to those employees who went to work during the strike whether they were new hires, employees from the layoff status, or strikers who left the picket line, they had to be given, if they went back to work before the end of the strike, a seniority advantage that would put them ahead of those employees who remained out on strike.

Justice William J. Brennan: Well, I think, in that way they had the decision as if they had (Inaudible) in the employ of the employer for 20 years.

Now, was that for all purposes are only for layoff and --

Mr. Norton J. Come: It was only for layoff and recall for layoff.

Justice William J. Brennan: Not for transfers up to the --

Mr. Norton J. Come: No, Your Honor, and I'd like to return to that a bit later on when we talk about Mackay.

But the proposal recited on its face and the testimony bears it out, that this 20-year seniority was to apply only in the event of layoff and recall for layoff.

It was not to be use for bumping from one job to another or for determining vacations or other benefits that turned upon seniority.

Justice William J. Brennan: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Now on May 28th, the Company, as I've indicated, specified that the kind of plan that they had in mind would have to be in the neighborhood of 20 years additional seniority.

Now at a Union meeting on May 29, the strikers, when acquainted with this proposal, unanimously resolved to continue striking until the Company abandoned its insistence on super-seniority, which it never did.

As although there were subsequent bargaining meetings at which the seniority question was discussed, the Company still insisted upon some form of super-seniority.

Chief Justice Earl Warren: We'll recess now.

Featured:

Labor Board v. Erie Resistor Corp. - Oral Argument, Part 2

Tue, 25 Sep 2012 22:34:34 +0000

Case:

Labor Board v. Erie Resistor Corp.

Media File:

288_19630219-argument-2

Related Transcript:

288_19630219-argument-2

Transcript:

Argument of Norton J. Come

Chief Justice Earl Warren: --versus Erie Resistor Corporation, et al.

Mr. Come.

Mr. Norton J. Come: May it please the Court.

I indicated at the conclusion of the argument yesterday that a bargaining meeting of May 28th, the Company had indicated to the union that the superseniority that they thought they needed would have to be in the neighborhood of 20 years.

Well, in ensuing weeks, this superseniority plan, this 20-year plan, was announced to the employees.

There was, first a letter by the Company on June 10 to all the employees and members of the union indicating that 20 years additional seniority would be given to employees who went to work during the strike.

After that announcement, the number of returning strikers drastically shot up.

Up to that point, there had only been about eight strikers who had returned.

With the June 10 announcement, the number shot up to 87, and the next week there was a further announcement and the number shot up to 125.

At that point, which is about June 25th, the union capitulated and decided that it would have to call on to strike.

A contract was entered into reserving the superseniority question for a further litigation before the Board and the courts.

Chief Justice Earl Warren: Was that -- was that made open to outsiders also or just to the members of the union that were on strike?

Mr. Norton J. Come: The superseniority was offered to outsiders as well.

It was offered to new hires, to employees who returned to work, who were in the layoff category as well as to employees who were on strike.

So it was --

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: Yes, a 125 came back who were striking.

Justice William J. Brennan: Out of how many?

Mr. Norton J. Come: There were 478 on strike --

Justice William J. Brennan: How many -- how many strikers came back before the announcement of the seniority?

Mr. Norton J. Come: Before the announcement of the seniority, you had about eight strikers who had returned.

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: That is correct, Your Honor.

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: About that, yes, sir.

That would be 125.

The Company then began to recall the strikers who had not been replaced in order of seniority and built up its workforce gradually back to about 450 levels.

This was around June and July.

However, in September and May into the next year, it was necessary to layoff, and as a result, a substantial number of strikers were laid off who were reduced to junior status solely as a result of this 20-year superseniority program.

Justice Arthur J. Goldberg: Theres no attempt to strike in the labor contract as [Inaudible] testified, isn't that correct?

This is a strike over the contract, is that correct?

Mr. Norton J. Come: Yes, Your Honor.

Justice Arthur J. Goldberg: What is the theory as to what obligations the employer has for contract [Inaudible] with respect to seniority?

Is there any move that Congress [Inaudible]?

Mr. Norton J. Come: Well, I think certainly he cannot unilaterally alter the existing condition without bargaining with the union.

It was at all --

Justice Arthur J. Goldberg: [Inaudible] based on the character or no opinion?

Mr. Norton J. Come: Well, of course as you appreciate, Your Honor, that is a problem that is being litigated in the -- in the courts right now.

That was in the Glidden case, it's been in the Ross Gear case and we're at the threshold of answering that question.

In this case, however, since they did enter into a new contract which continued the seniority provisions of the -- of the old contract, I think you had the two superimposed, one upon the other so quickly that -- that we don't have that gap here.

The only new thing that was added was this superseniority program which favored those who had returned to work during the strike for purposes of future layoffs.

Justice Arthur J. Goldberg: The contract itself does not resolve as to that specific requirement, is that correct?

Mr. Norton J. Come: That is correct, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: That is correct, Your Honor.

Now a complaint was issued --

Justice Potter Stewart: This -- this was add -- this superseniority, as you call it, was added at a time as Justice Goldberg has pointed out when there was no collective bargaining agreement in effect between the representatives and the employers, isn't that right?

Mr. Norton J. Come: That is correct.

Justice Potter Stewart: And that it's also represented in the briefs for the -- for the respondent that continual efforts were made to bargain about this during that period, during that interim period.

Mr. Norton J. Come: That is correct, Your Honor, but the Board found that although the company was willing to bargain about the number of years or the form of the superseniority, at all times it was insisting that it had to have some kind of an arrangement which would give a preferential seniority advantage to those employees who returned to work during the strike.

So that I think that, although the number of years might have been left open, there was no question that at all times the Company was taking the position that it had to prefer those who went to work during the strike ahead of the strikers.

Justice William J. Brennan: Mr. Come, I gather there's no doubt the union -- there's no question that the union status has exclusive representative, was it?

Mr. Norton J. Come: There was no question, Your Honor.

Justice William J. Brennan: Well is it -- is it the Board's position then that notwithstanding there was, of course, no agreement than existing, nevertheless, even though there was a strike going on, this was a subject matter of mandatory bargaining?

Mr. Norton J. Come: Well, I think that the Board's position is that, whether there was a contract in effect or not, this kind of a seniority clause is illegal and that the company could not insist upon it.

Justice William J. Brennan: But what I'm trying to get at -- what I'm trying to get at is why is illegal --

Mr. Norton J. Come: Well I'm --

Justice William J. Brennan: Because they couldn't unilaterally adopt it that is the subject matter of bargaining or --

Mr. Norton J. Come: No, I want to -- I want to get to that right now.

It was illegal because the Board found that such a clause is inherently discriminatory and restrains the exercise of the right to strike in violation of Sections 8 (a) (1) and Section 8 (a) (3), and I'd like to turn to that right now.

Section --

Justice William J. Brennan: There was no -- there was no 8 (a) (5) charge here.

Mr. Norton J. Come: There was an 8 (a) (5) charge here but the 8 (a) (5) charge flows from the finding that the clause is violative of Section 8 (a) (1) and (3) because it --

Justice William J. Brennan: What's the case we had last year?

I wrote it, I can't think of the name of it.

Mr. Norton J. Come: The case that you had, Your Honor, was the Katz case.

Justice William J. Brennan: Katz.

Mr. Norton J. Come: In which it was held that it was a violation of Section 8 (a) (5) to grant a unilateral wage increase in the course of negotiations.

Justice William J. Brennan: Does that -- does that have any relevancy to this present case?

Mr. Norton J. Come: It has only a tangential relevance in that it shows that if you -- there are certain kinds of conte -- conduct which might be so inconsistent with the provisions of the Act that it could be a violation in a per se sense, let us say without necessarily finding that the company had a bad motive here.

Justice William J. Brennan: But in any event, for the purposes of this case, the Board's position is only that this is an 8 (a) (1) case.

Mr. Norton J. Come: It's an 8 (a) (1) and an 8 (a) (3) case.

Justice William J. Brennan: Yes.

Mr. Norton J. Come: The Board found that it violated both sections and if the Board is sustained on that, then there's no question that the 8 (5) would follow because it's an 8 (5) to insist upon in the illegal clause.

Now, I'd like to address myself to the 8 (a) (1) aspect of the -- of the case for us.

Now, Section 8 (a) (1), as the Court is well aware, makes it an unfair labor practice for an employer to restrain or coerce employees in the exercise of Section 7 rights.

Now, a normal strike for economic objective is of course, a concerted activity protected by Section 7.

Now, a seniority program that prefers nonstrikers to strikers, which is what this program did, manifestly restrains and coerces employees in the exercise of the right to strike irrespective of what the company's ultimate motive may have been.

Now, the worker who accepts employment during the strike and the employee who returns to work are rewarded.

They get their seniority standing boosted.

Well, the employee who stays on strike is penalized solely because he has elected to continue to exercise his right to strike and the reward and the penalty are inextricable.

They're like a double-edged sword because seniority is, by its very nature, a relative thing, and if you're going to boost up one person's seniority, you're necessarily going to reduce the relative seniority advantage.

Justice William J. Brennan: Well suppose -- suppose -- suppose instead of offering superseniority, the employers said they will pay 10 cents or 15 or 25 cents more an hour than we've been paying so anyone would take employments.

Would that be the same case?

Mr. Norton J. Come: That might be a different case, although I --

Justice William J. Brennan: It would have the same effect, wouldn't it?

Mr. Norton J. Come: Well, superseniority has a much more pervasive effect and as I'm going to try to show you, this is a question of balancing competing interests here and the superseniority clearly tips the scales.

My own view is that at the offering of the additional wage incentive would also tip the scales and I think that you have cases that would support them, although, an argument could be made in the other direction.

Not --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: Well, I think that that is exactly what we have to get down to and I'm going to try to show the Court that the effects of -- of this superseniority policy are much more drastic and pervasive than the kind of replacement that was permitted in Mackay.

But the thing that I wanted to point out before I get to Mackay is that the key to these cases is not merely, whether or not, the employer has an ultimate business motive for what he has been doing here.

Now, it's true that not every interference with Section 7 activity amounts to a violation of Section 8 (a) (1) of the Act or 8 (a) (3) of the Act.

It's been recognized by the Board and the courts including this Court that the National Labor Relations Act has to be read in such a way as to accommodate other competing legitimate interests.

And for that reason, for example normal business decisions such as granting a wage increase or reducing wages even though it may have an incidental consequence of affecting union or concerted activity may be privileged if motive is a legitimate one and you lose that privilege if the motive is not legitimate.

By the same token, however, there are -- is a class of activity and that's usually the situation where union or concerted activity is singled out as the basis for discrimination where the effect on the exercise of the Section 7 right is so drastic that it cannot be -- it is not privileged even though the employers' ultimate objective may be a business one.

Now, in Mackay, the Court held, and that was in 1938, that in economic strike, the employer in the interest of continuing his business could hire replacements for the strikers and give them permanence.

That was an accommodation that was made in the interest of enabling the employer to run his business.

Justice Byron R. White: Well, isn't that -- doesn't granting seniority rather pay in comparison to people losing jobs?

Mr. Norton J. Come: Well I think, Your Honor, that when you look at the way it works, it is not held.

I appreciate you -- you can view it as something lesser because after all you are taking the employee back and he doesn't -- he doesn't lose a job, but let me try to show you what does happen and in the Board's view, this is -- this is far worse.

Justice Byron R. White: Well, a fellow who comes back -- the union member who comes back after the strike with standing behind 20 years of seniority, but he certainly is standing -- at least he's standing there in the plant.

And then some of his friends, they aren't even back to the plant.

Mr. Norton J. Come: Well, let me make clear first of all that the Company here did not need this superseniority plan in order to guarantee the permanence which Mackay is talking about.

Mackay says that if you replace a striker with a replacement permanently, that striker is not entitled --

Justice Byron R. White: This isn't really an important issue of that point.

Is it that you would make the same argument whether it was or it wasn't, because it may have been -- I'm assuming you're arguing the case on the assumption that, that it was necessary to give the superseniority, to get the fellow in at all, and in that sense, it was essential in order to give -- in order to give him permanence --

Mr. Norton J. Come: And was there --

Justice Byron R. White: And by you wouldn't have given -- you wouldn't have even the plan at all.

Mr. Norton J. Come: It was not essential for him to retain that job vis-à-vis the striker that he replaced because this superseniority policy, as I pointed out yesterday, apply only in cases of future layoffs.

It could not be used for bumping and the testimony in the record makes it quite clear that if you put into a job, let us say a replacement and the striker who had that job at 30 years seniority came back, he couldn't claim that job even without this 20-year superseniority.

The only thing that the 20-year program did was to guarantee that the replacement, not only would be able to oust the striker who he replaced which is what Mackay says, the employer can do, but that repla -- but that replacement would, in the event of layoffs at sometime in the future, also have the additional advantage of being able to bump out other strikers who were not replaced during the strike and had returned for work.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: Well, I think it is, Your Honor, and I think that demonstrates the very serious impediment that is imposed upon employees who have exercised their lawful protected right to engage in --

Justice William J. Brennan: Well your point, Mr. Come, I gather is that, this gives the new employee a preference not only to the fellow who's left out in the street because he takes his job, but also in the event of layoff, it gives him a preference over someone who actually had come back to work after the strike, but who now, by reason of this 20-year, has lesser seniority in the --

Mr. Norton J. Come: That is correct, Your Honor and for that reason, we submit that the Board correctly concluded that this was far different and far more serious than the right to permanent replacement that is recognized by --

Justice Byron R. White: Mr. Come, isn't this just a rule of permanency?

I mean that the thing is that the time it's really going to operate, is raised in the time of layoff, the fellow seniority doesn't get laid off and seniority has the more permanent job than the fellow without seniority.

Mr. Norton J. Come: But look to what it --

Justice Byron R. White: That is the -- that's the only way it operates, isn't it, in terms of permanency?

Mr. Norton J. Come: But, Your Honor, look also what it does to the exercise of the right to strike.

I've shown you on the facts of the --

Justice Byron R. White: Well, I'm sure I gather you're really saying that Mackay was wrong.

Mr. Norton J. Come: No, Your Honor, I'm not saying that Mackay is wrong.

I'm saying that Mackay rests upon a balancing of the conflicting interest.

The interest of the employer in running his business as against the impairment to the right to strike, and at some point, you go too far and the question is whether the Board was reasonable in concluding that the way this superseniority policy operates, that the gain, the possible gain to the employer is so outweighed by the detriment to the employees and the impairments of the right to strike that on balance it is not privileged by the Act.

We submit that the Board was reasonable --

Justice Hugo L. Black: You mean on this particular case?

Mr. Norton J. Come: What is that, Your Honor?

Justice Hugo L. Black: You mean on balance on this particular case under the circumstances of this particular case or you're saying always that way?

Mr. Norton J. Come: I think the Board's position is always that a -- that any plan which would discriminate on the basis of whether the employee remained out on strike or not in terms of seniority, by its -- by its--

Justice William J. Brennan: I mean what -- if what -- this does come down to this that Mackay said that an employer may displace a striker if it's an economic strike, but Mackay did not say that it may also displace a striker who returns to work at some later date when a later layoff comes along.

Mr. Norton J. Come: Yes, Your Honor.

Justice William J. Brennan: And your position is that to the extent that it gives the employer not only the right to displace a striker, but also gives him the right to oust on a later layoff someone else that that is an interference and made a -- with the right to strike which goes too far.

Mr. Norton J. Come: Yes, Your Honor, and it also violates Section 8 (a) (3) for reasons that I've set forth in my brief.

Justice Arthur J. Goldberg: [Inaudible] Suppose that the job that was replaced is on the production job, suppose that under [Inaudible] labor board or that he have to yield to the striker who comes back?

Mr. Norton J. Come: He may have to yield to the striker who comes back, Your Honor.

I'm not familiar that -- with any particular case on that point but --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: That may well happen.

Thank you.

Chief Justice Earl Warren: Mr. Wayman.

Argument of John G. Wayman

Mr. John G. Wayman: Mr. Chief Justice, Honorable Justices.

The sole issue in this case is the Board's declaration of what it calls superseniority is per se unlawful in violation of Section 8 (a) (3) and derivatively of 8 (a) (1).

Because when I say derivatively of 8 (a) (1) because at the very beginning of this case, counsel for the Board said he was not claiming any violation of 8 (a) (1) aside from this so-called superseniority.

And there is not a word of evidence in this case unlike almost every other case that we have seen, that could support a finding of violation of Section 8 (a) (1).

Put another way, in the absence of the illegality, the per se illegality of what the Board called superseniority, Erie Resistor was found guilty of no unfair labor practice.

The affirmative findings are that it was not guilty of an unfair labor practice, that it did bargain in good faith, that it had a lawful, legitimate, economic motive for what it did.

Up until the day, I have not heard the word per se mentioned in this case from the time of the original hearing.

This suggests to me as I suggested to the Circuit Court, that perhaps the Board is not proud of its doctrine, I think it should not be proud of its doctrine per se.

Furthermore, as it clearly appears here from the argument made by my worthy opponent, the Board wants us to argue every case of superseniority, as they call it.

They want us to say that superseniority is absolutely privileged, that it matters not what the circumstances.

Under Mackay, any employer can grant superseniority just as he can replace employees.

We have never said that.

We do not say that now.

It is not the theory of this case.

It is not even in the Court with the facts of this case, it never has been.

This case, however, was selected by the Board as a vehicle to establish a per se illegality doctrine.

The Board's counsel said so at the outset of the hearing.

It upset my client a good deal to be in the middle of defending himself against this charge.

At the very time, the General Counsel issued a ruling, SR 509, in which on identical facts, General Counsel found another employee not even required to answer a complaint on the proposition that he had a lawful economic motive and that this was in accord with Mackay Radio and Olin Mathieson.

We didn't think that was the way a board ought to operate, because this is a serious matter to the smaller company.

It involves something over a million dollars in back pay and that's not a small amount of money to a company that employs 450 people or so.

This is a threat to every man in that plant.

Not just to replacements, but the strikers who have returned who incidentally are all working today, thanks to the fact the company has recovered from this strike after about two and a half years of struggle.

The complaint against Erie Resisor had a number of counts.

One of them was this per se illegality, which was the real reason for the case.

Another was that in adopting the policy of superseniority, as they call it, their purpose was not to save the plant but to punish the strikers.

This count was completely disapproved.

There is not a word of evidence to support it in the record.

The Board did not find out to be the fact.

The trial examiner found that not to be the fact.

Consequently, if motive be the test, Erie Resistor is not guilty.

There were many counts for refusal to bargain in various ways.

After all the hearing that we went through in the trial examiner's report and Board's decision, we were found not guilty of any of those charges.

This is an extraordinary thing in a case where an employer is charged with the violation of 8 (a) (3), because it leaves standing naked and alone this per se illegality of what the Board calls superseniority.

We have referred to the trial examiner's findings, page 59-a of the record and page 64-a of the record.

Yesterday, I believe the question was asked whether or not there was a finding that this so-called superseniority was necessary to get replacements to come to work, and that's a rather extraordinary example of the treatment the Board has given to this case.

Perhaps 350 or 400 pages of these thick books are devoted to prove that it was necessary to give what they call superseniority to the replacements to get them to come to work not simply because it's obvious that every man wants a permanent job and not a temporary one, but because we had extraordinary violence on the picket line here.

And as you will see if you read the record, I believe it's the testimony of Mr. Burton that many people who were hired didn't come to work.

They were afraid to come to work.

We had 300 applications, yes, but you can't run a plant with applications.

You have to have people and we couldn't get the people because they would not risk crossing the picket line and risk the censure of these neighbors of theirs unless they were assured of a permanent job.

It was necessary.

This is a finding of the trial examiner.

The Board did not reverse that finding.

Instead, on page 19 and not 29, the Board said it refused to consider this fact.

It would not pass upon it because in the Board's view, any superseniority is illegal per se.

They didn't use the words per se, of course, but any superseniority is illegal and therefore they didn't even consider this fact.

And now when we come before the Supreme Court, I heard the argument made and it was not necessary to have this additional seniority for replacements in order to get them to come to work.

We could only wish that that was so, but it is not so and the record will not support such a statement.

Now, we have to suggest that, and I think we have in our briefs suggested that the Board hasn't defined what it means by superseniority except to indicate that in its eyes it's something pretty bad.

After about 20 years of dealing with labor unions, big ones and little ones, and negotiating many contracts, I don't know what the word means.

Justice Arthur J. Goldberg: Well, Mr. Wayman, [Inaudible]

Mr. John G. Wayman: Indeed you have, sir, in fact, you and I on occasion.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I will certainly do, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: That is sir, Your Honor, but seniority itself means nothing unless it's more than someone else has, so the term -- the term superseniority to me is meaningless unless it is defined in context and in the circumstances of a particular case and contract and this is my point exactly.

I can't defend the term superseniority and I don't intend to.

Justice William J. Brennan: It doesn't it mean to credit for service not served?

It's an artificial and synthetic seniority, is that right?

Mr. John G. Wayman: It could.

It could mean that.

I don't know what the Board has in mind.

Justice Potter Stewart: Well, that's what it means in this case.

That's what it means in this case.

You're getting somebody credit for 20 years that is not on payroll.

Mr. John G. Wayman: In respect we gave them credit for 20 years but not in the respect that you use seniority generally because he is limited in his ability to use it.

All this so-called superseniority did was to give him the right to stay in the plant.

It did not fix a term.

In other words, it didn't say this superseniority will go on for a year or a day, although in the settlement agreement, they did said, “It would continue until decided by the courts,” but had the union been willing to bargain on the matter, perhaps, we could have done something with that.

Mackay Radio doesn't fix the term either.

Under the circumstances of this case, there was no way at all for this company to assure these replacements of permanence of tenure and to keep the promise, which I suppose everybody would want them to do, unless they either gave these people some additional seniority beyond the date that they were hired, the artificial credit that mentioned, or made some other arrangement with the union.

Because we had on the date the strike began, about 450 people on layoff and under the contract that was in effect when the strike began, there was no terminal point for this seniority.

It just went on and on.

As Mr. Justice Goldberg would agree, I think, this is an unusual feature in a contract that there it was.

We had 450 people with no prospects of reemployment but having seniority.

As a practical matter, certainly it would make no sense to replace people on layoff because nobody would take a job simply to be laid off.

We had to replace people that were working and if we did and if we give the replacement seniority just from the date they started to work, as soon as the strike ended, they would go to the bottom of that 450-man layoff list and there would be no permanence of employment the fact that might just as well find.

This was a problem that faced this Company, unlike many companies it's an unique situation.

Justice Arthur J. Goldberg: What was the -- what was the Mackay Radio problem [Inaudible], is that correct?

Mr. John G. Wayman: That is certainly my understanding in Mackay, Your Honor.

Justice Arthur J. Goldberg: [Inaudible] are you arguing that for each case the Board would have to make a determination that where there's the order of superseniority that [Inaudible]?

Mr. John G. Wayman: That is certainly a part of our argument because that's the holding of all the circuit courts which have dealt with the subject of superseniority.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I would say that in determining whether or not there was a violation of the Act by granting additional seniority under the circumstances, it was reasonably necessary for the employer to grant this or to use this tactical device in order to obtain the replacements and this is what the Courts of Appeal have said.

They have never said there's an absolute privilege to grant superseniority.

I wouldn't expect them to.

We didn't expect them to.

The Company in this case complied religiously with those decisions.

It followed them exactly.

They had good counsel, Mr. Murphy.

He told them they should follow the law and they did follow the law.

And this is why they were so distressed when after the matter was all over having followed the law conscientiously, they find themselves accused of a violation of the law and not permitted to make any defense at all.

This is the thing that shocked us.

This is the narrow point in this case; not whether or not the Board correctly found facts because it didn't find any facts.

It said it didn't have to consider the facts.

All additional seniority for replacements is unlawful.

That's the proposition.

The Court of Appeals would not accept that proposition.

The Court properly said, in violation of 8 (a) (3), motive is an indispensable factor and so it is under every case that has been decided in the Courts of Appeal or in the Supreme Court.

Let us consider now what the Company might have done in this situation.

It might have simply replaced these people, said nothing at all to the union, and gone ahead and kept them out after the strike.

It could have replaced every one of the strikers, which would have broken them.

It could have simply not negotiated a contract containing seniority because the contract had expired and after the expiration of that contract, there was no seniority.

To the company's everlasting credit it did none of these things.

It never ceased to try to make a contract with the union.

It never refused to sit down with the union and try to make a contract that had some usually satisfactory seniority arrangement.

It is not true that the Company insisted on superseniority.

The word “superseniority” was put into Mr. Farrell's mouth, but if you look at page 156-a of the record and 161-a of the record as examples of Mr. Farrell's efforts to make this clear, he said, “We took a positive position where we're going to have to have some sort of protection for these people in the way of giving them job assurance that we have told them they would have.”

He did not say superseniority and at page 161-a, he was asked about superseniority by General Counsel and he said, “I object to superseniority per se because my company said the Company consistently evidenced its willingness to negotiate with the union as to the form of the assurance would take.”

In this particular case, what we are talking about is the Company's effort to keep a lawful promise to the replacements that they would not be discharged when the strike was over.

Now, they could have done this with -- excuse me sir.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: If they did, Your Honor, the Board did not consider it an unfair labor practice because this promise was made before May the 28th and the Board said there was -- there was no unfair labor practice up to that time.

Justice Arthur J. Goldberg: But in our case, putting aside [Inaudible]

Mr. John G. Wayman: I would say, sir, that that is correct in any case in which you replace employees with permanent replacements.

This is always true.

It makes it much more difficult to bargain.

There's no question about it.

But this is not due to the particular case we have here.

This is true of every case in which you have permanent replacements because the union's ultimate position was all the replacements have to be discharged.

Well that made it very difficult to get a contract, but again, to the company's credit, they did get a contract.

The strike did end and strangely enough, well, they're criticized for it, the record shows clearly that they hired only so many permanent replacements as they absolutely had to have in order to survive.

When this college let out in June, they hired college boys and told them, “This is temporary.”

They used clerks who make awfully poor production people, I might say, and sometimes labor relations men who are worse.

And they try to get by with any method they could without displacing any of their striking employees, but if this plan didn't operate, it would die and it almost did die.

This was no question of just building up the profit.

This was a question of surviving.

What was done here was purely defensive, but really no choice.

And yet in spite of this dreadful fact, the Company still tried to bargain with the union, it never took the position that the union is out or break the union.

It wouldn't make the contract of the union exactly the contrary is true.

Instead of condemning a company like this, it should be commended.

This is not to say there was no problem.

Indeed, there was, and there still is, but I do believe it's a kind of a problem that could have been solved by collective bargaining as the union had been willing to bargain.

I want to say one word too but the emphasis that's been placed on the additional seniority granted.

My friend, Mr. Come suggests in his presentation that perhaps the purpose of this grant of additional seniority was to entice strikers to come back.

That is absolutely unsupported in this record.

The record shows that the contrary is true.

This Company carefully avoided an invitation or enticement to the strikers to return, but when they did or if man who wanted to come back to work, the Company didn't say, “No, you can't do it,” but the need for replacements was not to get the strikers to abandon the strike, it was to get strangers and outsiders to come in to work and this was the only reason that this policy was adopted.

Furthermore, the policy was adopted only after about 11 unsuccessful negotiating meetings in which it appeared that there was no chance of getting the union to agree to any arrangement that would allow the replacements to stay at work.

Chief Justice Earl Warren: There's a notice in the record, the notice that they -- they put out concerning the reemployment of strikers.

Mr. John G. Wayman: It is, sir.

The notice itself or several notices on May the 3rd, the company sent a letter to all its employees, strikers, and others, telling them that on May the 6th or 7th, they would begin to hire permanent replacements and that anybody who is replaced could have his job only to that point then he'd have no job.

Then they began to bargain with the union on the very first day they hired a replacement, suggesting different ways of handling this but not getting any where.

On May the 28th, they handed this so-called 20-year proposal to the union.

The union, of course, rejected it along with everything else, but oddly enough on May the 30th, the union got on the television station and broadcast this all over Erie.

The Company has -- had said this is confidential, we're trying to bargain on, but the union got on the television and said, “This is the company's policy.”

So on that day, the union broadcasted and then people did indeed began to come in, not by any announcement on our part, but by an announcement on the union's part.

Finally, on June the 10th, a letter was sent out and published, saying that the policy had been adopted and on June the 15th, a notice was posted on the bulletin board.

Those, I believe, are the notices concerning the policy.

No special letter, which I am aware of, was sent to the strikers, but if the striker came in and said, “I want to go to work”, we said, you can go to work.

We would be glad to have them of course.

It's not by any special inducement.

In this respect, I should like to answer one other question that was asked, whether or not, this differs from offering say replacement, an additional 10 cents per hour.

Yes, it does in our view because offering a replacement an additional 10 cents per hour has nothing to do with his permanence of tenure.

There is a vast difference between a permanent replacement and a strike breaker.

We do not believe we have no favor for strike breakers.

If I want to hire a strike breaker, this is the way I would do it.

I would offer him a big bonus to come in and work during the strike with the understanding that he can get out as soon as the strike is over.

This is a strike breaker.

But if I want --

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: Well it's a distinction that Congress made.

I think it's a very real one, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I think it is, Your Honor, and I think there are two keywords in what you said to do what is necessary.

In other words, I think that the decisions of the Courts of Appeals have said that you must demonstrate a need not simply that you -- I thought it was a good idea but you had a genuine need, not something subjective but objective through.

And this we offered and this was never refuted.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: If that's the definition that's put on it, yes, but whenever you say do what is necessary, then I think you come back into the definition of these various Courts of Appeals.

If your purpose is simply to punish the strikers, it's unlawful.

If your purpose is solely to operate the plant, and I think you ought to demonstrate a need to do it, then it's lawful.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: He has that right.

Justice Arthur J. Goldberg: Did he have a record?

Mr. John G. Wayman: Indeed he does.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I don't think it's irrelevant.

I think that there is a difference between a man who operates because he has to, to survive and here I'm talking about defensive as opposed to offensive weapons, economic weapons, there is a difference.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: It has nothing to do with or under Mackay.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I don't believe that that's the kind of weighing that the Board ought to do whenever they declare something per se unlawful.

This is balancing for Congress, not for the Board.

However, I do say this that there is a distinction between operating the plant and hiring replacements, a distinction made in Mackay.

You may operate your plant even though it's an unfair labor practice strike, but you may not hire permanent replacements in an unfair labor practice strike and this is a very significant difference, but we met the test in Mackay, every one of them.

We satisfied them all on this record.

Unless this is per se unlawful, we were guilty of no wrong.

Justice Byron R. White: Well, would you in Mackay, would you say that -- would you say that at the moment the strike started, the company offered jobs to permanent replacements or look suddenly for permanent replacements and at that moment offered superseniority, I take it, you would almost think you'd have to try first to get replacements without superseniority.

Mr. John G. Wayman: I do believe that is correct, Your Honor.

I think you must.

Justice Byron R. White: And you must -- you must -- you would think they offered superseniority at the very outset then you might be in more trouble than you think you are now.

Mr. John G. Wayman: Well, I think we are not in trouble now.

We would be then, yes Your Honor.

Justice Byron R. White: But -- if you try to fail the -- then succeeded with superseniority, I take it, you think you are on -- in the preferential right.

Mr. John G. Wayman: I believe that is entirely within the law, Your Honor, yes sir.

Justice Byron R. White: Then that's what you think these facts are.

Mr. John G. Wayman: Indeed they do.

There can be no other conclusion drawn from this record.

Justice Byron R. White: And in that sense, you've demonstrated need.

Mr. John G. Wayman: Yes, sir.

Chief Justice Earl Warren: Thank you, Mr. Wayman.

Featured:

Locomotive Engineers v. M.-K.-T. R. Co. - Oral Argument

Thu, 29 Nov 2012 22:23:06 +0000

Case:

Locomotive Engineers v. M.-K.-T. R. Co.

Media File:

165_19600420-argument

Related Transcript:

165_19600420-argument

Transcript:

Argument of Harold C. Heiss

Chief Justice Earl Warren: Number 165, Brotherhood of Locomotive Engineers et al., Petitioners, versus Missouri-Kansas-Texas Railroad (Inaudible) -- Mr. Heiss.

Mr. Harold C. Heiss: Mr. Chief Justice and Members of the Court, if the Court please.

The petitioners here are four railway labor organizations in the operating group.

The respondents, plaintiffs in the District Court, are two railroad companies which sought and obtained an injunction against the strike by the operating employees of the two railroad companies.

The cause is before Your Honors on a writ of certiorari through Court of Appeals of the Fifth Circuit.

And review by this Court is limited to a single question which is spelled out on the second page of petitioners' brief on the merits, the blue-covered document on the bench.

The cause involves a decision of this Court rendered about three years ago, known in railroad parlance as the Chicago River case.

Unknown Speaker: (Inaudible)

Mr. Harold C. Heiss: The cause involves -- the cause involves a decision of this Court rendered about three years ago, known as the Chicago River case, wherein this Court held that an injunction may lie against railroad employees who seek to promote a strike to enforce payment of demands of some character which may be pending before the National Railroad Adjustment Board, a tribunal established under the Railway Labor Act and having the authority and power to interpret agreements made under the Act between employees and railroad companies.

In granting the strike injunction in this cause, the district judge imposed certain conditions upon the issuance of the injunction which were protective of the interest of the employees, the defendants, and protective of the interest of the public.

On appeal, the Court of Appeals sustained the strike injunction, but excised from the order of the District Court, the conditions deemed to be protective of the interest of the other litigants and the public.

Unknown Speaker: (Inaudible)

Mr. Harold C. Heiss: No, Your Honor.

The injunction was issued in only one form, on -- on December 18, but later on, to wit, on January 5, 1959, in denying a motion for a stay as by the railroad company, the district judge in that order denying the stay explained what he meant in some detail when he issued the original order to wit, that he intended that the conditions imposed upon the railroad company, protective of the interest of the employees were conditions upon the issuance of the injunction and were not a mandatory order directed against the railroad company.

Justice John M. Harlan: (Inaudible)

Mr. Harold C. Heiss: Yes.

I think it would be susceptible of that interpretation, Mr. Justice Harlan.

Unknown Speaker: (Inaudible)

Mr. Harold C. Heiss: Yes.

Yes, precisely so, Your Honor.

Unknown Speaker: (Inaudible)

Mr. Harold C. Heiss: I don't think it's any different, take -- except that I think this, Your Honor, that I -- I don't mean it's any different to this extent.

I think there is only a conditioning of the issuance of the injunction.

But I -- I think we might get into some other ancillary legal propositions if we were to regard this as a -- as a mandatory injunction of a preliminary nature in which event, we might get into the area of determining whether a bond should be required, for example.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: Insofar as the practical consequences are pictured.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: I think you're right, Your Honor, in that respect.

Justice Charles E. Whittaker: (Inaudible)

Mr. Harold C. Heiss: It couldn't possibly, in this case, have involved the condition a -- a decision on the merits, Your Honor.

The -- the -- I think I'll come to that in a little bit, but the District Court expressly disclaimed any intention of deciding on a -- deciding the matter on the merits and a study of this record will reveal that there was no decision on the merits and you can't possibly read into any of the orders of the District Court, a view either way on the merits.

Justice Charles E. Whittaker: (Inaudible)

Mr. Harold C. Heiss: Yes, I think it would, Your Honor.

Now, to us, this review involves the somewhat startling proposition which was approved by the Court of Appeals that a court of equity, while issuing an injunction against the strike of railroad employees, is without power to further exercise its equitable jurisdiction, to impose conditions protective of the interest of the employees against whom the injunction was issued and the public which has an interest in the settlement of labor disputes.

Now, I think, Your Honors can best appraise and understand the question involved in the cause, in the context of the facts, which I think I can state to you in brief compass.

For 25 years, there were in effect, on the respondent railroads, intradivisional runs between the points of Wichita Falls, Texas, and Forgan, Oklahoma.

There were five terminals which are illustrated by the fingers on my hand.

Two runs ran from Wichita Falls to a place named Altus, one run from Altus to Elk City, one from Elk City to Woodward and one from Woodward to Forgan.

Those runs had been established by the collective bargaining agreements entered in -- into by the employees, which provided also that the runs that had been established and the terminals through which they ran could not be changed without notice given under the agreements and without notice or without notice given under the Railway Labor Act.

These agreements were -- were negotiated by the employees to prevent an arbitrary and unilateral action on the part of the railroad companies to change these -- just these runs.

Now, in violation of the agreements, on October 2nd, 1958, the carriers issued two general orders that new interdivisional runs would be established and that certain home and away-from-home terminals would be abolished.

The employees asked that the orders be cancelled.

They asserted that the action of the respondents was contrary to the Railway Labor Act and contrary to the terms of the collective bargaining agreements.

When the carriers refused to cancel their notices, the employees invoked the services of the National Mediation Board and despite the fact that the National Mediation Board took jurisdiction of the dispute, the respondents put the general orders into effect on October 19, 1958, approximately two weeks and a half after the orders were issued.

Now, the orders have this effect upon the employees whom I represent here.

Two terminals were abolished this one and this one.Home and away-from-home terminals.

The runs were made to run from Wichita Falls to Elk City and from Elk City to Forgan, Oklahoma.

The man who lived here and the man who lived here, were obliged either to travel to this point or this point, to perform their work or to move their homes from the same places to distant points.

An uprooting of their homes, a dissolution of family, social and religious ties were entailed by the -- by the general orders issued by these railroad companies.

In addition, the employees who have these two places, as away-from-home terminals, had their way from home terminals changed and modified and they were obliged to solicit and seek new porters living away-from-home for their turnaround runs and finding new places to eat and all of the dislocations would go to a traveling man, when he finds that his place of -- of performing his work has been changed to another location.

In addition to that, 10 employees were immediately furloughed by the action of the carrier in issuing these general orders.

The number of crews that had been operating between these points was reduced from five to three.

Now, their submissions made to the National Railroad Adjustment Board, which had not been made at this time, but which come into the case at a later point, do not involve anything other than a -- a request for disposition by the Adjustment Board of the question of whether the agreements have been violated.

They do not involve the question of whether these employees are entitled to any compensation or paid for time lost.

Now, obviously, no payment in money, whatever compensate these men for the time that they must spend in travelling from their home terminals to new places to report for work, for seeking for the hardships and the burdens that they endure in moving their homes, severing their social and family and religious ties, and in seeking new places to sleep and new places to eat at newly established way from -- away-from-home terminals.

I emphasized to you, if Your Honors please, that nothing that the Adjustment Board can do -- can possibly compensate my clients for the hardships imposed upon them by the general orders of the railroad companies.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: The -- the Adjustment Board has just one thing that the railroad company its -- and its -- in its submission has asked the Board to decide.

And that is whether the terms of the collective agreements, prohibit the railroad company from issuing these general orders and making changes in the interdivisional runs and of the terminals.

Justice Felix Frankfurter: What can you get?

Mr. Harold C. Heiss: That the railroad --

Justice Felix Frankfurter: All the railroads are saying that (Inaudible)

Mr. Harold C. Heiss: The practical consequences are that the general orders would remain in effect as they are now and these runs would be changed as the general orders contemplate.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: Yes.All of the dislocations that are presently taken place would be -- would be continued if the decision of the Adjustment Board should be in favor of the railroad companies and against us.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: That's it.

That's it, Your Honor.

To ward off the hardships --

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: I -- I'm coming to that and I'd just as soon answered, no.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: I just hope that I will have an opportunity to get to it and I'm going to make every effort to do it.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: Oh, it is crucial and I must get to it, Your Honor.

Now, when the -- when the employees went on strike on November 6, a temporary restraining order was issued.

On a hearing on the preliminary injunction which took place in December of 1958, Judge Davidson, the -- district judge as I've told the Court before, issued the strike injunction, but imposed upon it the conditions that the status quo ante, the status quo which existed so far as working conditions were concerned which, as I say, existed before the issuance of the general orders should be restored or in lieu thereof or an alternative, if the railroad company elected.

The carrier might choose to pay the employees for their losses.

Now, on December 10, which was just about a week before the hearing on the preliminary injunction, the carrier had elected to submit this matter to the Adjustment Board and to another -- a number of other disputes, committees, and national committees, which submissions are not involved in this case inasmuch as the review is limited only to the issuance of the injunction as a result of the Chicago River decision.

Now, the district judge apparently regarded the Chicago River case as requiring the issuance of this preliminary injunction despite the belated recourse to the Board, but he did not regard the case as prohibiting his exercising the traditional powers of a chancellor to protect all the litigants as well as the public in the injunction case.

Now, the Court of Appeals regarded the Chicago River case apparently as requiring the issuance of the -- in strike injunction and as prohibiting the imposition of any protective conditions.

Because it said that such conditions would involve and I quote, “Passing a preliminary judgment upon the merits of the -- of the disputes committed to the exclusive jurisdiction of the Board.”

Now, I submit to you that the imposition of the condition does not involved passing upon the merits of the contentions between the parties.

Certainly it doesn't involve passing upon merits of the contention between the parties in this case, any more than it does in any other case where a preliminary injunction or a temporary restraining order is under consideration by the Court.

And this Court has frequently in cases in the past not -- not those arising under the Railway Labor Act, but in other causes coming before the Court held that it is proper in issuing an injunction to establish and attach certain other conditions which would be protective of the defendants against whom the injunction ran.

And I -- I say that that is just a normal exercise of the equitable powers of the chancellor and it has been frequently held by according to my understanding that the rulings upon temporary restraining orders are not -- and preliminary injunctions do not involve a -- a -- an indication necessarily of the ultimate disposition to -- to evade by the Court of the controversy.

And the --

Justice John M. Harlan: It involves some appraisal about that.

Mr. Harold C. Heiss: It necessarily involves some appraisal somewhere --

Justice John M. Harlan: Because the -- if the Court thought that the claim -- which are not suggesting for a moment, was a flimflam claim, it would a bearing and whether you got issue in a temporary injunction.

Mr. Harold C. Heiss: I -- I can see it, Mr. Justice Harlan, that it does allow some weighing.

One must necessarily in --

Justice John M. Harlan: Not the kind of weighing that would influence the determination of the adjustment.

Mr. Harold C. Heiss: That's precisely it.

Justice John M. Harlan: But that's your -- that's your point.

Mr. Harold C. Heiss: That's precisely it.

And the district judge plainly and clearly stopped short of entering such an order as would influence the Adjustment Board or which would be binding upon the adjustment for it.

But --

Justice Charles E. Whittaker: In --

Mr. Harold C. Heiss: But --

Justice Charles E. Whittaker: -- other words, all the District Court would determine here with -- with whether a claim was not colorable merely.

If -- if it were not, then exclusive jurisdiction is somewhere else.

Mr. Harold C. Heiss: That's right, Your Honor.

Justice Charles E. Whittaker: Okay.

And as I understand it, what he did here, if you still listen, was merely to assume that the contract he brought, but he couldn't assume to be bad and that exclusive jurisdiction to say what they've meant was in the railway -- Railway Adjustment Board --

Mr. Harold C. Heiss: Yes, sir.

Justice Charles E. Whittaker: -- and therefore, to put the -- this, the old machinery, in status quo ante to determine and let the Board determine and give a fact to whatever its conclusion really was.

Mr. Harold C. Heiss: Yes.

Justice Charles E. Whittaker: That if not --

Mr. Harold C. Heiss: Yes, that's precisely it.

That's a much better statement than I could have made of it, Mr. Justice Whittaker.

And I appreciate the statement of it in that fashion.

Justice Felix Frankfurter: But suppose that (Inaudible)

Mr. Harold C. Heiss: But I -- I -- whether that is what he meant or not, Mr. Justice Frankfurter --

Justice Felix Frankfurter: (Voice Overlap) --

Mr. Harold C. Heiss: -- it's the practical effect of -- of what -- of what Judge Reeves said.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: The procedure that we -- that -- that was adopted by Judge Davidson, the District Court, in this case, permits the work of the Adjustment Board to have full play.

But it didn't -- in the meantime, it protects the employees against arbitrary and unilateral rapacious conduct on the part of the carriers which may sweep aside the -- all the rights of the employees in the meantime --

Justice Charles E. Whittaker: Under a contract that maybe held good.

Mr. Harold C. Heiss: Yes.

Yes, Your Honor.

Justice Felix Frankfurter: And that would --

Mr. Harold C. Heiss: Yes, yes.

This contract maybe held good and by the time the Adjustment Board gets around to decide this dispute, four, five, six or seven years from now, they may have well have worn down these employees to the point where they have no longer any voice in the situation.

Justice Felix Frankfurter: The Fifth Congress of the workings of the Adjustment Board has been a constitutional problem having before this Court on (Inaudible) and one has a brief study and would say a lot of (Inaudible) awkwardness in (Inaudible) in that situation.But after that, I don't know if we could take that into account in determining whether the respective domain of power of the Supreme Court in -- in that -- or first number of deposits.

Mr. Harold C. Heiss: Well, may I suggest, Mr. Justice Frankfurter, that --

Justice Felix Frankfurter: That maybe -- that --

Mr. Harold C. Heiss: -- the justice delayed is often not justice at all.

And we're dealing here with working men who would depend upon the -- results of their daily labors to eat and to maintain their families and may not -- may not the chancellor take that into account among other factors in -- in weighing what his decision is.

Now, I don't know whether Judge Davidson did so.

Because there are no findings and there are no preference to it in the order.

But may I suggest to it that if I see a problem?

Justice Felix Frankfurter: Suppose the Adjustment Board decides in your favor and it deploys that decision, it certainly can (Inaudible) what controverted in their case?

What's in that that is affecting (Inaudible)

Mr. Harold C. Heiss: I don't think they can do anything else.

Their powers are limited to the interpretation of the agreement which would amount to a declaration or declaratory judgment and that would end the matter so far as the Adjustment Board is concerned.

Justice Felix Frankfurter: And if in the meantime, this burden has to do it and the Court has decision to affirm it.

The (Inaudible) we would've had if the contract doesn't (Inaudible) what we need to have there.

Mr. Harold C. Heiss: What?

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: What relief, have the employees?

Justice Felix Frankfurter: Yes, the employees.

Mr. Harold C. Heiss: If they are sustained, they probably could -- could sue for back pay or to institute another proceeding for the Adjustment Board.

We -- and I suppose --

Justice Felix Frankfurter: Including a monetary -- a monetary (Voice Overlap) --

Mr. Harold C. Heiss: For claims, yes.

Justice Felix Frankfurter: So why couldn't that be -- why can't that be before than this (Voice Overlap) --

Mr. Harold C. Heiss: Because it's not -- it was not submitted by the railroad -- by the railroads to the Adjustment Board as an issue.

Justice Felix Frankfurter: And that ground is contrary to your license?

Mr. Harold C. Heiss: The men haven't made a counter claim and I don't know whether they can.

But let -- let us not forget --

Justice Felix Frankfurter: (Voice Overlap) --

Unknown Speaker: I didn't understand you.

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: I -- I am --

Justice Felix Frankfurter: But they could start in -- they could initiate a proceeding for the Adjustment Board for monetary claims which is granted and then bring forth from a judgment by the Adjustment Board, isn't that right?

Mr. Harold C. Heiss: They could, provided that they -- that a time limit on claims provision is not in the contracts of the Missouri-Kansas-Texas Railroad, in which the circumstances he claims could not be filed at the present time, because at the time that --

Justice Charles E. Whittaker: And -- and I suggest perhaps possibly if, but only if full redress of he contract was remediable at law.

Mr. Harold C. Heiss: That's right.

I was about to suggest that again, Mr. Justice Whitaker, that the uprooting of these, before the requirement to move their homes to travel longer distances and all of these things cannot possibly be compensated for, in terms of money, or by any proceeding before the Adjustment Board or by any order that that Board could make.

Justice Felix Frankfurter: And not many of them.

Suppose the railroad is sustained by the Adjustment Board, what about (Inaudible)

Mr. Harold C. Heiss: I -- I think there is entailed in practically every order that is issued by way of an injunction.

Some hardships upon the other side and we are enjoined from striking which is a hardship against us and the railroad company according to Judge Davidson -- Davidson's order, he's ordered to -- to restore the status quo ante which -- for all the time that the injunction is in effect, maybe some sort of a burden upon the railroad company.

But they are the folks who were elected to draw to the Adjustment Board and submit the case to that tribunal and they didn't have to do it.

They could've settled the matter with us in conference.

There was a remedy available to them.

But they elected to go to the Adjustment Board and it seems to me that they must take the consequences of that.

Justice Felix Frankfurter: (Voice Overlap) what the internal arbitral arrangement passed at the outset under your present agreement (Inaudible) under the Railway Labor Act (Inaudible)

Mr. Harold C. Heiss: They were not even initiated by the railroad companies, Your Honor.

The -- these contracts provide --

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: No, but --

Justice Felix Frankfurter: (Inaudible)

Mr. Harold C. Heiss: I understand, Your Honor.

The contracts provide that a railroad company desiring to establish interdivisional runs in order to -- to change these terminals must give notice to the employees of the -- their intention to do so.

They didn't give that notice.

Justice John M. Harlan: What is the present situation, Mr. Heiss?

Did this Court of Appeals give you a stay --

Mr. Harold C. Heiss: It did not.

Justice John M. Harlan: -- of this mandate?

Mr. Harold C. Heiss: It did not.

Justice John M. Harlan: What's happened as a practical matter, is your people --

Mr. Harold C. Heiss: Some are living --

Justice John M. Harlan: -- staying at their locations?

Mr. Harold C. Heiss: -- at the abolished terminals and going to the new terminals to go to work.

Others have --

Justice John M. Harlan: Was the case moot?

That's what I'm getting --

Mr. Harold C. Heiss: Oh, it is not.

It is not.

Justice William O. Douglas: Is this the only time that a District Court has attached conditions as far as you know?

Mr. Harold C. Heiss: No, Your Honor.

There is a case which -- pending before this Court on a petition for a writ of certiorari which is Number 535 and comes from this -- the Court of Appeals for the Second Circuit, which involved the imposition by the district judge of a -- of a condition that while the strike injunction was in effect, that certain operators of tugs in New York Harbor be retained in -- in service.

On appeal, the -- the Court of Appeals for the Second Circuit by a 2 to 1 decision, sustained the injunction, but set aside the conditions on -- when advised --

Justice William O. Douglas: It's in accord -- it's in accord with the Fifth Circuit then.

Mr. Harold C. Heiss: Yes, it's in accord with the Fifth Circuit and just one further statement in answer to -- to your question.

While the matter is here on the petition for a certiorari and the United Rail -- Railroad Workers case, the Court of Appeals for the Second Circuit has stayed its mandate.

It is my understanding that the tugboat workers in New York are presently on the job as the result of the District Court's order.

I am grateful to the Court for the privilege of having appeared before you today.

Chief Justice Earl Warren: Mr Clinton.

Argument of M. E. Clinton

Mr. M. E. Clinton: Mr. Chief Justice and Associate Justices, I would first like to clear up some erroneous statements of fact, but before getting to that, I want to state that a strike actually occurred on a railroad, without warning to us at 6 o'clock on November the 6th -- 6 a.m., on November the 6th, 1958.

Our train -- and your -- the service employees actually went on strike.

It tied up our railroad from St.Louis and Kansas City on the north through Oklahoma City, Dallas and Fort Worth, to Houston and San Antonio on the south.

It completely stopped all of our line movements except for a few trains who -- which were permitted to go to some sidetrack.

It stopped every bit of our service to some 3600 industries that we've served along.

Stopped our service to about 1300 other industries which we served jointly with other people, 1100 of our train service employees ran out of service, so although there were only 10 people involved in this particular matter, we were completely paralyzed until we filed our suit for an injunction and got a temporary restraining order on that day.

Chief Justice Earl Warren: You say, there are only 10 people involved in this --

Mr. M. E. Clinton: 10 people, Your Honor, the -- this draft --

Chief Justice Earl Warren: I understood counsel to say that a number of other employees, which would be required by group themselves.

Mr. M. E. Clinton: No, sir.There is only 10 people involved in this particular controversy, 10.

If this strike had not been stopped, we would've been compelled to layoff some 2100 other people who were not directly in incidentally.

About 83% of all of our revenues are derived from interstate commerce and handling the United States mail.

I mentioned that to show the interstate character of our service.

The organizations filed an answer to our complaint and they set out in this answer that we had violated specific agreements.

They alleged that we had violated what is termed "schedule agreements" which are the agreements under which we actually operate.

While they set out Article 10 and Article 11 and Article 59 and Article 60, they finally wind up in this Court.

They're claiming only that we violated Subdivisions (a) and (f) of Article 10 and Article 59.

They also alleged that we had violated four so-called mediation agreements, which were agreements negotiated nationally and then adopted by the different railroads on the various properties.

And they alleged that we had violated the three so-called national agreements.

One of which, they now admit, is not in existence.

So they're here now before you with two.

The so-called national agreements are the agreements which Mr. Heiss referred to as interdivisional run agreements.

I will get to those a little bit later.

After this answer was filed, we prepared submission, a submission to the National Railroad Adjustment Board and we referred to that Board every claim to the agreement violation which the organizations had alleged in their answer.

And we also are subject to jurisdictional objections which are set out in each submission, made submissions to a committee which was established by the so-called national agreement committees which were established by the so-called mediation agreements and to the National Mediation Board.

We wanted to be absolute -- certain that we had followed every possible recourse administratively.

The National Mediation Board, as you will find in appendix to our brief, has said, "That in effect, that the case is properly sent to the Adjustment Board and to these other committees."

And therefore, they have sort of washed their hands of it.

You'll also find that three of these so-called disputes committees which grew out of mediation agreements, have dismissed the cases, as we thought they should do.

Two of --

Justice Felix Frankfurter: Do you think committees are between -- are constituted by representatives of the railroad companies?

Mr. M. E. Clinton: Yes, sir.

They are.

Justice Felix Frankfurter: And you say they dismissed these claims?

Mr. M. E. Clinton: Three of them did -- dismissed the claims.

Two of them set outright that they didn't have jurisdiction.

The other one said it didn't have jurisdiction because it had been submitted to one of these national committees which of course is an error because we couldn't submit that issue to that particular committee.

Now, the -- the organizations have filed their answer before the Adjustment Board and we have filed our reply to that answer before the Adjustment Board.

So, the matter is pending there whenever the Board gets around to it.

Justice Felix Frankfurter: Wouldn't that be four years?

Mr. M. E. Clinton: I don't know, sir.

If it is four years and we have to comply with this order, we will have paid out $140,000 for which we have no -- no bond or anything else.

It's $35,000 a year according to our testimony which you find on page 302 of the record at the top of the page.

Justice Felix Frankfurter: (Inaudible)

Mr. M. E. Clinton: Yes, sir.

And I'm not surprised this -- not more.

I was really surprised this morning when I looked it over, because I think it runs higher than that, but that's what the record shows.

Justice Charles E. Whittaker: Now, as I understand in this (Inaudible) that consists of the elimination of two of the five crews that we bargained in this Texas thing.

Mr. M. E. Clinton: Yes, sir.

That's what it is.

And if I may, I'll get to the facts a little bit later, or I'll stop and now and get to the facts.

If you wish to look at the map, you'll find it at page 79 of the record and you'll find that this area we're talking about is from Wichita Falls, Texas and the parallel in green line, I believe, is beside the red line, Wichita Falls, Texas up to Forgan, Oklahoma, a distance of 302 miles.

We have five crews in there and they run an average distance of 75 to 80 miles a day.

Justice Potter Stewart: How many in the crew?

Mr. M. E. Clinton: Five men, conductor, two, brakemen, engineer and a fireman.

For many, many years, we operated out there with steam engines.

And as you may know, you have to have more terminals when you have steam engines.

They gave (Inaudible) for them.

And it can't have as many cars.

At any rate, some 25 years, we had this intra -- so called divisional service.

It's not an interdivisional service at all, because the entire area as one, seniority district.

The Board, so called, is maintained in Wichita Falls.

There's no break over those intermediate cause of Altus and Elk City and Woodward.

I drew a freight crew.

It operates anywhere within that whole area.

He's called off of the Board in Wichita Falls.

And it's because of those peculiar facts, one of the reasons we say, that this so-called intradivisional rule that Mr. Heiss talks about, has no application.

We say it was never intended that that rule apply where you had one single sort of seniority district and anybody working on that district could run anywhere.

Furthermore, that rule specifically says that where a carrier desires to establish an intradivisional service, that service that we had had been established 25 years.

It was never intended to apply to the situation other than where you wanted to create an intradivisional service, where you never had it before.

Furthermore, that rule was never intended to be retroactive.

I knew it became effective on August 1, 1952.

Justice Potter Stewart: Excuse me, Mr. Clinton, this goes to the merits of the issue now before the Adjustment Board.

Mr. M. E. Clinton: Yes, sir.

It really does, I've mentioned, because it's touched upon by the others.

Excuse me.

So, we say that this intradivisional rule that he talks about doesn't have any application in the first place.

Now, they only know this provision that you here are going to find these rules is in that intradivisional rule, if that rule applies.

And for example, we have a service.

I'll illustrate it this way.

We have crews that operate from Dallas, in Texas to Fort Worth.

And we have crews that operate from Fort Worth on to Bellmead or Waco.

Now, that's one seniority district from Dallas and to Waco.

But we have an agreement with them, a special agreement which makes us change crews at Fort Worth.

Now, we if wanted to establish a run from Dallas into Waco, through Fort Worth, that would be an intradivional service and we would have to comply with Article 4, because it's something that we don't have now and are prohibitive now by agreement from him.

But for now this preliminary -- here injunction was issued, at the hearing on December the 18th.

A contrary to our opponent, this preliminary injunction is not a condition.

There is not one single word in this injunction which even indicates that the court intended the injunction against the strike to be conditioned by us maintaining or is doing some status quo.

It's a straight out, mandatory -- preliminary mandatory injunction against us.

But it doesn't say that you have to restore the status quo.

It says that if you elect or prefer, you can leave the situation as it is, just so long as you pay these people.

Well now, the District Court was not attempting to protect these men against moving or against disrupting their homes.

Otherwise, we would recommend him there.

All he was concerned about was that these men be paid, one way or the other.

And all this talk about disrupting their homes and all, is decided before the court, the District Court didn't even -- didn't even attempt to protect it.

They say they are satisfied with the District Court's order.

Well, if you're satisfied with it, they are satisfied only when they want a provision of.

Now, we appealed from this preliminary mandatory injunction on December the 29th.

And we applied to the District Court as we had to, for a motion to stay the operation of this preliminary injunction against us until we could appeal.

Now, we say that when we appealed from that on December the 29th, the District Court was ousted of any jurisdiction until the mandate was returned.

And he couldn't modify his order if he wanted to.

And we say that he can't come along after an appeal was made and then undertake to say that I intended thus and so, when he didn't say it the first instance.

But he denied the stay order and we went from the Fifth Circuit and they granted it.

And I'd like to mention that there are no pleadings of any character to support this preliminary or mandatory injunction against us.

I never heard of a situation where a mandatory injunction was issued out, somebody asking for it.

These people didn't ask for it.

It was gratuity, apparently.

There's no evidence of any kind in this record to support this mandatory injunction.

In fact there's no evidence in the record by these people at all.

You won't find any evidence to support anything that Mr. Heiss has said that they put it and is certainly not in what we put.

Justice John M. Harlan: The Court of Appeals, as I understand it, reached only the question of power and they didn't reach the question of whether this was an abuse of discretion assuming there was power, is that right?

Mr. M. E. Clinton: That's correct.

There was no security required at all, although Rule 65 (c) of the Federal Rules of Civil Procedure says that "No preliminary injunction shall issue, without security, being required in whatever amount the court sees fit to protect the people against whom the injunction is issued."

So, we say that even for those reasons, that this so-called condition which is not a condition, but a preliminary injunction is void and should -- and that the decision of the court below, should be sustained.

But now getting down to this invasion of the jurisdiction of the Adjustment Board, one, I believe, Justice -- Mr. Justice Frankfurter said with something about what would happen if the -- if the Board sustained this.

Suppose we go along and we have to pay out $140,000 and then the Board comes along and says, “Well, you're right in the first place.

How can we go and get our $140,000 back?”

Apart from that, to the extent that the Board has found and we had a right to do what we did, there is a direct conflict between what the Board holds and what this Court requires.

The Court says “Pay them, we pay them."

The Board says, “Don't pay them, you don't at all.”

It was a direct conflict and to that extent there's bound to be an invasion.

You can't get away from it.

I don't say the District Court said, “The contract requires it.”

He didn't say that.

But he puts a salient position where there can be and, I think, will be a direct conflict between the decision of the Board and this preliminary injunctions.

Justice Hugo L. Black: Suppose that the Board should hold that they were right, what would be the result with reference to the page, assuming there had been no adjustments?

Mr. M. E. Clinton: I'm glad that you mentioned that.

It's true that we submitted to the Adjustment Board the claim to violations of these agreements.

But it's also true that these people can submit to us time claims.

They can say, “You had no right to deprive these 10 men to work and you owe us for everyday that you didn't use them.”

If we deny those time claims, they can go to the Adjustment Board on those time claims.

And that time claim demands can be consolidated with this thing that we have here now.

And if the Board holds it against us, they can award payment of every dollar that they would've been paid if this change had never been made.

Justice Hugo L. Black: Would you have to pay it or you could try it over?

Mr. M. E. Clinton: Sir?

Justice Hugo L. Black: Would you have to pay enough that it be -- would have to be tried out in court?

Mr. M. E. Clinton: Under the -- now, under the statute, as I understand it, a money award is not binding (Inaudible) binding here until the court award them -- a court orders the payment on them.

We could pay it.

Justice Hugo L. Black: You could but --

Mr. M. E. Clinton: We could --

Justice Hugo L. Black: -- you would not be required to without a suit is that correct?

Mr. M. E. Clinton: We would not be required to, but in that suit they get their highest fees.

Justice Hugo L. Black: Was anyone -- was any suggestion made at any time assuming that he had in a power at all that instead of requiring you to pay them, the money be put into a fund so that it could be disposed of by court order later?

Mr. M. E. Clinton: Yes, sir.

We -- we made that suggestion in the District Court ourselves.

We said to Judge Davidson were adjudged, we are perfectly willing to put the money in escrow.

So, we'll have some protection.

And he said, “I'm not interested in your escrow.

And he took it as an offense.

You'll find that in the record.

Justice Hugo L. Black: That would have protected both sides.

Mr. M. E. Clinton: That would have protected both sides, yes, sir.

Justice Hugo L. Black: (Voice Overlap) --

Mr. M. E. Clinton: And that distinguishes the Inland Steel Company case that they cite.

In that case the court did take the money and put in on a fund.

And furthermore, in that case, which they rely upon, the attorney, for the party opposing in, agreed to it, which is not -- those two things distinguishing the Steel case.

Justice Felix Frankfurter: That -- let's if I understand you.

As I understood you, you suggested Judge Davidson examined it, Judge Davidson.

Did he enjoin -- didn't he provided the statute (Inaudible)

I am making or having reduced these men in their old position pending the determination, by rejection of the Board but it merely wanted to procure the payment for them, the wages they would have had, is that right?

Mr. M. E. Clinton: That's what it amounted to.

Justice Felix Frankfurter: But I don't understand why turning the money in escrow was just (Inaudible) who I finally, I'd ask them, did you take of the problem?

Mr. M. E. Clinton: We were willing to do it.

Justice Hugo L. Black: What reason was given for not doing it, does the record show?

Mr. M. E. Clinton: The record's -- the record -- it contains and I think -- about page 300 and -- let me see.

302, is where Mr. Touchstone, one of our attorneys, brought the subject up.

Let's see.

Last line on 302, the court I don't think any stock in your indemnity (Inaudible) or escrow agreement.

And --

Justice Felix Frankfurter: What page you're in?

Mr. M. E. Clinton: It's page 302 at the bottom of the page, where that statement appeared, 302.

And --

Justice William J. Brennan: Well, that -- would that statement of the judge -- a couple paragraphs earlier, Mr. Clinton, indicate that it is also influenced by the fact that even an escrow arrangement would have meant that these men would have been out of work for a while?

Mr. M. E. Clinton: It might have been and I'm not sure but --

Justice William J. Brennan: Well, he says -- we know they are risking everything, three months wages knocked out, would put the wolf at their door.

Mr. M. E. Clinton: That -- that's probably --

Justice William J. Brennan: In the escrow, that's where wouldn't have paid the --

Mr. M. E. Clinton: I know, but it -- that's true.

But at least, would have in part, satisfied the requirement of law that we be given some protection.

All the way through, apparently, the judge rather assumed that there had been some violations to these agreements.

Well, there hasn't been, as I will try to show you and --

Justice Felix Frankfurter: Where -- where do this indicate that they thought it wasn't?

Mr. M. E. Clinton: The very fact that he ordered us to either restore the status quo or to take care, but in the meantime, rather indicates certainly, and I can't point out the other places, but all the way through that's import evidence I get.

Justice Felix Frankfurter: I suppose that wasn't briefed.

There's some kind of a -- there's some kind of a -- there's some kind of the view about the merits.

Mr. M. E. Clinton: Probably there's some.

[Laughs]

Justice Potter Stewart: Each of the --

Chief Justice Earl Warren: (Inaudible) specifically, they survived or making any judgment on the merits.

We're referring to the merits of the --

Mr. M. E. Clinton: Well, that I -- I think that's probably true.

Chief Justice Earl Warren: What is their -- what is their contrary to fact that says that you can't consider the merits of it, in deciding of the case?

Mr. M. E. Clinton: The only -- the -- the thing that's most important is, is what he did.

Actually -- regardless of what he said, the fact that remains that this is what he did and if as a matter --

Chief Justice Earl Warren: But all the way through, all the way through --

Mr. M. E. Clinton: Yes.

Chief Justice Earl Warren: -- it doesn't have to (Inaudible) he's standing the merits --

Mr. M. E. Clinton: No, I didn't --

Chief Justice Earl Warren: What if they're in there, all the way through that indicates that?

Mr. M. E. Clinton: I didn't mean to say if I did, that it indicated that he was deciding the merits.

What I had in mind was it indicated that he had thought perhaps, there had been a violation of the agreement.

That's what I meant to say.

Unknown Speaker: (Inaudible) --

Mr. M. E. Clinton: Well, if he thought there's a violation of the agreement, it might influence him in attaching a -- putting this mandatory injunction on us.

I think that is true.

Justice Potter Stewart: I must say -- Mr. Clinton, the record though indicates, doesn't it, that the district judge had a -- had an inaccurate idea of how fast these matters are processed by the Adjustment Board, because as I read it here, didn't he say that if the Railroad Adjustment Board cannot act in 30 days, you can come back with a further motion.

Mr. M. E. Clinton: Yes, he did have a misunderstanding about that.

Justice Potter Stewart: Now, did you go back within 30 days or -- or I not exactly 30 days?

Mr. M. E. Clinton: No, we didn't go back, as we appealed, but following the preliminary mandatory injunction.

Justice Potter Stewart: One thing of course, to -- (Inaudible) injunction, if the matter is going to be resolved in a few days or weeks in quote another, perhaps, not only in agreement in kind, the condition on injunction, that's the ultimate resolution, isn't going to occur for five or six years.

Mr. M. E. Clinton: I'm not sure whether it was in the District Court or the Circuit Court, but in one of them, I was asked my best guess on it, and that my best guess was probably more than four years, but I'm not sure it was in the District Court --

Justice Potter Stewart: No idead and I misread the -- this record or is there something I don't see, didn't the district judge indicate he had an idea that this matter would be resolved in 30 days (Voice Overlap) --

Mr. M. E. Clinton: He did have that idea at that particular point.

I don't know right now whether it was cleared up more elsewhere or not.

Justice Felix Frankfurter: Mr. Clinton, what is then -- what is meant at the Court, the statement had only 10 mailer involved and basically (Inaudible) drawing that order and while they're protesting it, this agreement rather, there was the 3000 men will be great to resist the motive by what is done.

Mr. M. E. Clinton: I think he had in mind that if the strike were to continue and the matter were not disposed of, that there'd be that many or more involved.

Chief Justice Earl Warren: What the case is -- what the case (Inaudible) the other men on this case were closed, I mean I think that (Inaudible) that there were more than 10 (Inaudible)

Mr. M. E. Clinton: No.

They were five crews, originally, with five men on each.

That's 25 men.

In linking in these runs, we took off two crews or 10 men and left all the men who were involved in this litigation.

Of course, as Mr. Heiss says, the Chicago River case holds that you may enjoin a strike while the matter is pending before the Adjustment Board.

But we think that the decision and certainly the reasoning in Pitney case, sustains us in this particular matter.

As Mr. Justice Black probably remembers, he wrote the opinion in that case in the Order of Railway Conductors, brought a suit to -- among other things, enjoin the trustees in a bankruptcy proceeding from -- assigning certain jobs to men who belong to the Brotherhood of Railroad Trainmen.

And I have to get some of this from a dissenting opinion of Judge Rutledge but it appear -- appears from what what the majority opinion says and what the dissenting opinion says that for a while, until there was a hearing in the case, there was a temporary order issued which prevented that transfer of work from the O.R.C to the B.R.T men.

The decision in this case was that no court could invade the jurisdiction of the Adjustment Board, that the thing for the O.R.C. is due, would be two of the Adjustment Board and find out and let the Board see, whether its contract gave it the right to these jobs or not.

And if they did have the right, then maybe the court in the exercise of its equity power, to protect what the sum in substance or it was that until and unless they went to the Board and got a decision of the Board that, they were entitled to the work, rather than the B.R.T., that no court, including a court of equity, give -- to give them relief.

Justice Rutledge, in a long dissent, expressed the thought that these men ought to be protected until the decision of the Board.

But apparently, the other members of the court thought otherwise, because he was the only one that raised that particular issue.

In the (Inaudible) case, which reaffirmed in the Pitney case, also written by Mr. Justice Black.

The -- and not only reaffirmed that, Pitney case, but they said no court, state or federal, can invade the jurisdiction of the Adjustment Board.

Now, we understand that that simply means that this Adjustment Board has been set up to decide these questions and that the no court can interfere in anyway with respect to any part evidence, you'd have to take it then, that's been decided.

Justice Felix Frankfurter: Mr. Clinton, may I ask you whether you think that any of them -- any of them has discretion (Inaudible) granting of the injunction that you -- unless you're if you're indictable in the district court.

In the District Court, you have any -- and if you raise this question (Inaudible)

Mr. M. E. Clinton: It's my opinion, Mr. Justice Frankfurter that he felt like when he was required to do it on the Chicago River case, and he did it because of that.

And I'm not so sure that we would have gotten it, if it hadn't been for the Chicago River case.

But I don't know anything else, (Inaudible)

Justice Felix Frankfurter: Because the element of discretion is almost (Inaudible)

Mr. M. E. Clinton: I think he felt that --

Justice Felix Frankfurter: (Inaudible) without (Inaudible)

Mr. M. E. Clinton: I think he felt that on the Chicago Junction case, where this -- their submission haven't been made with the Adjustment Board as he knew and their copies of their submissions were attached to an amended pleading of ours, that he had no discretion about it and was required the issue the injunction against the strike.

Not only do we think the Pitney case sustains us, but there is in -- other decisions of this Court have --

Justice William J. Brennan: Excuse, Mr. Clinton, I'm not -- I noticed within the record at 318, though he said; "I am a little uncertain.

Of course, I could just wash my hands and live to say, go on with your strike, but don't think I will."

That's at page 318 of the record."

I will withhold my decision until I can read this over, but I feel that this strike should not occur, if justice can be made to prevail without it."

In that -- that suggestion of some taking that he had some discretion?

Mr. M. E. Clinton: That maybe true, but that occurred on January the 5th, 1959.

The injunction was issued on December 18th, an appeal on December 29th.

So, if it was an afterthought on his part.

Justice William J. Brennan: Yes.

Mr. M. E. Clinton: In the -- in the Central Kentucky Gas case, which is cited in our brief, and which itself, was cited in the Inland Steel case.

There -- the Court there recognized that the right to attach conditions was not unlimited, and in that case they struck down conditions, because the Court found that the -- the lower court had no constitutional right to impose the condition involving gas rate.

And also in another case which is cited, Magniac versus Thompson, I believe, an old case, this Court recognized that -- aware that the -- the court of equity, notwithstanding, his equity powers, was required to follow the law.

We feel like that the Chicago River case and the Pitney case and the (Inaudible) case has charted the course for both parties in this case and therefore, a court of equity does not have a power in the exercise of equity powers to vary from those decisions and that route that's been prescribed for us.

Chief Justice Earl Warren: (Inaudible)

Mr. M. E. Clinton: Well then, thank you very much.

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