Norfolk & Western Railway Company v. Nemitz

In anticipation of a railroad consolidation by which petitioner acquired the so-called Sandusky Line from the Pennsylvania Railroad, petitioner entered into an agreement with certain labor unions for the protection of the employees involved. The agreement provided that the employees would not be adversely affected in their employment as a result of the transaction. Respondents were employees of the Pennsylvania, who worked seasonally on the Sandusky Line, and during the winter freeze which barred navigation on Lake Erie worked at other points on the Pennsylvania system. Upon the consolidation, respondents accepted employment with petitioner. The agreement called for a salary supplement based upon pre-consolidation monthly compensation. The Interstate Commerce Commission (ICC) in its consolidation approval stated that the agreement was "made pursuant to and in conformity with § 5 (2)(f) of the Interstate Commerce Act for the protection of the covered employees." Section 5 (2)(f) provides that the ICC "shall require a fair and equitable arrangement to protect the interests of the railroad employees affected," and states that "[n]otwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into" by any railroad and an employee union. A post-consolidation agreement was made between petitioner and the union, under which petitioner claimed that the salary supplement was limited solely to the amount paid respondents for their seasonal Sandusky Line work. The District Court agreed with respondents that the new agreement was not enforceable as it conflicted with the terms of the pre-merger agreement and this violated the Act under which the consolidation took place, and the Court of Appeals affirmed, with a modification as to damages.

Held:


 * 1. Section 5 (2)(f) provides mandatory compensation protection for railroad employees affected by a consolidation, and the ICC's adoption or approval of a pre-merger collective agreement becomes a "condition" of the ICC's approval of a consolidation under that section. Pp. 41-43.


 * 2. The "notwithstanding" proviso of § 5 (2)(f) affords the machinery for the terms of a pre-merger collective agreement and thus supplies one minimum measure of fairness required by the section. P. 43.


 * 3. The post-consolidation agreement abrogated the employees' rights and the standard of "compensation" covered by the pre-merger agreement that had come under the ICC's protective order. Pp. 43-45.

436 F. 2d 841, affirmed.

DOUGLAS, J., delivered the opinion of the Court, in which BRENNAN, STEWART, and MARSHALL, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BURGER, C.J., and WHITE, J., joined, post, p. 45.

Martin M. Lucente argued the cause for petitioner. With him on the briefs were Howard J. Trienens and John M. Curphey.

Thomas J. Murray, Jr., argued the cause and filed a brief for respondents.

Solicitor General Griswold, Fritz R. Kahn, and Leonard S. Goodman filed a brief for the United States et al. as amici curiae urging reversal.