Brotherhood of Locomotive Engineers v. Baltimore & Ohio Railroad Company/Opinion of the Court

Certiorari is granted and the judgment of the Court of Appeals is affirmed for the reasons stated in this opinion.

The petitioners, hereinafter referred to as the Organizations, are the Brotherhood of Locomotive Engineers, Brotherhood of Locomotive Firemen and Enginemen, Order of Railway Conductors and Brakemen, Brotherhood of Railroad Trainmen, and Switchmen's Union of North America. The respondents, hereinafter referred to as the Carriers, are the Baltimore & Ohio Railroad Company and 15 other named railroad companies, as representatives of a class of more than 200 such companies.

In February of 1959, the Association of American Railroads proposed the creation of a presidential commission to investigate and report on the possibility of a radical overhaul of working rules affecting the Organizations and their members in the light of substantial technological changes in the railroad industry. The basis for this proposal was that ' * *  * drawing up sound new work standards for the railroad industry has become so complex and challenging that the machinery provided for settling ordinary disputes appears hopelessly inadequate to cope with this task.' The Organizations opposed this proposal, and the President of the United States, in September of 1959, refused to appoint such a commission.

On November 2 of that year, pursuant to § 6 of the Railway Labor Act, the Carriers served on the Organizations notices of intended changes in agreements affecting rates of pay, rules, and working conditions. After conferences both on individual railroads and on a national level had failed to produce agreement concerning the proposed changes, the Organizations and the Carriers in October of 1960, under the auspices of the Secretary of Labor, agreed to the creation of a Presidential Railroad Commission which was to investigate and report on the controversy, and was also authorized 'to use its best efforts, by mediation, to bring about an amicable settlement * *  * .' The parties agreed that the proceedings of the Commission were to be accepted ' *  *  * as in lieu of the mediation and emergency board procedures provided by Section(s) 5 and 10 of the Railway way Labor Act.' The Commission was created by Executive Order 10891 in November of 1960, U.S.Code Congressional and Administrative News 1960, p. 1693, and its members were appointed in December of that year.

The report and recommendations of the Commission were delivered to the President on February 28, 1962, and national conferences on the issues which remained in dispute resumed on April 2 and continued through May 17. No agreement having been reached, the Organizations on May 21 made application for the mediation services of the National Mediation Board pursuant to § 5 of the Railway Labor Act. Between May 25 and June 22, approximately 32 meetings were held by the Organizations and the Carriers under the auspices of the Chairman of that Board, but no agreement was reached. The Organizations having refused to submit the dispute to arbitration, the National Mediation Board on July 16 terminated its services under the provisions of the Railway Labor Act.

On the following day, the Carriers served notice on the Organizations that, as of August 16, 1962, changes in rules, rates of pay, and working conditions would be placed in effect by the Carriers. On July 26, the Organizations brought the present suit seeking a judgment that the proposed rule changes would violate the Railway Labor Act. Subsequently, the Carriers, with leave of court and without objection from the Organizations, withdrew their July 17, 1962, notices, and substituted therefor the notices which had been served on November 2, 1959, to become effective August 16, 1962. The Organizations' complaint was then amended to seek similar relief against those notices.

The District Court found that both parties had exhausted all of the procedures available under the Railway Labor Act, and that they were therefore free to resort to self-help, restricted only by the possibility of the appointment of an Emergency Board by the President under the provisions of § 10 of the Railway Labor Act. It therefore dismissed the complaint for failure to state a cause of action. The Court of Appeals affirmed. 310 F.2d 503.

The petitioners insist that, because the Court of Appeals characterized the Organizations' actions as reducing negotiations to 'sterile discussion,' its opinion must be read as holding that the right of the Carriers to serve the § 6 notices here at issue somehow arose as a penalty for the Organizations' failure to bargain in good faith. No evidence was introduced below as to the good faith of either of the parties during the lengthy bargaining proceedings prior to the institution of this suit, and there is nothing in the record before us to indicate that either party acted in bad faith. Any contrary implication in the opinion of the Court of Appeals is disapproved.

The Court of Appeals concluded, as had the District Court, that the Railway Labor Act procedures had been exhausted, and that therefore the § 6 notices served by the Carriers were proper. The Court of Appeals correctly rejected the contention of the Organizations that the standards contained in the notices themselves violated the Railway Labor Act. As this Court has pointed out, '(t) he Railway Labor Act * *  * does not undertake governmental regulation of wages, hours, or working conditions. Instead it seeks to provide a means by which agreement may be reached with respect to them. The national interest * *  * is not primarily in the working conditions as such. So far as the Act itself is concerned these conditions may be as bad as the employees will tolerate or be made as good as they can bargain for. The Act does not fix and does not authorize anyone to fix generally applicable standards for working conditions. The federal interest that is fostered is to see that disagreement about conditions does not reach the point of interfering with interstate commerce. * *  * ' Terminal R. Ass'n of St. Louis v. Brotherhood of R. Trainmen, 318 U.S. 1, 6, 63 S.Ct. 420, 423, 87 L.Ed. 571. See also, National Labor Relations Board v. American Nat. Ins. Co., 343 U.S. 395, 402, 72 S.Ct. 824, 828, 96 L.Ed. 1027.

The only question presented, therefore, is whether the record before us sustains the finding of both lower courts that the parties have exhausted the procedures provided by the Railway Labor Act for major disputes such as that involved here. As this Court stated in Elgin, J. & E. Ry. Co. v. Burley, 325 U.S. 711, 725, 65 S.Ct. 1282, 1291, 89 L.Ed. 1886:

' * *  * (t)he parties are required to submit to the successive      procedures designed to induce agreement. § 5 First (b). But     compulsions go only to insure that those procedures are      exhausted before resort can be had to self-help. No authority     is empowered to decide the dispute and no such power is      intended, unless the parties themselves agree to      arbitration.'

The 1960 agreement establishing the Presidential Commission contained a provision purporting to accept the Commission's proceedings as a replacement for the procedures required by the Railway Labor Act. Whether or not such a provision could effectively forestall either party from resorting to the procedures of § 5 of the Act is a question which we need not decide, because the services of the National Mediation Board were in fact specifically invoked by the Organizations, and the Board's procedures were exhausted. Similarly, although arbitration pursuant to § 7 was refused by the Organizations, that section clearly provides that 'the failure or refusal of either party to submit a controversy to arbitration shall not be construed as a violation of any legal obligation imposed upon such party by the terms of this chapter or otherwise.'

There is, consequently, no question of bad faith or misconduct on the part of either party justifying the other side's unilateral imposition of changes in working rules. What is clear, rather, is that both parties, having exhausted all of the statutory procedures, are relegated to self-help in adjusting this dispute, subject only to the invocation of the provisions of § 10 providing for the creation of an Emergency Board. And on this basis the judgment below must be, and is affirmed.

Affirmed.

Mr. Justice GOLDBERG took no part in the consideration or decision of this case.