Pennsylvania Company v. United States Railroad Labor Board

This case involves the construction of title 3 of the Transportation Act of 1920. Chapter 91, 41 Stat. 456, 469. The title provides for the settlement of disputes between railroad companies engaged in interstate commerce and their employees, and as a means of securing this, it creates a Railroad Labor Board and defines its functions and powers.

The Pennsylvania Railroad Company began this action by a bill in equity against the Railroad Labor Board and its individual members in the District Court for the Northern District of Illinois, where the Board has its office, averring that the suit involved more than $3,000, and praying an injunction against the defendants' alleged unlawful proceedings under the act and especially against their threatened official publication under section 313 of the title that the Railroad Company had violated the Board's decision under the act.

The defendants moved to dismiss the bill on the ground that the suit was one against the United States without its consent, and also for want of equity and a lack of a cause of action. They also filed an answer making the same objections to the bill as in the motion and setting forth by exhibits more in detail the proceedings before the Board and its decisions. The District Court heard the case on the bill, motion and answer, and granted the injunction as prayed. The Board appealed to the Circuit Court of Appeals (282 Fed. 701) which reversed the decree and directed the dismissal of the bill. The decree of the Circuit Court of Appeals, not being made final by the statutes, the case is brought here by appeal under section 241 of the Judicial Code (Comp. St. § 1218).

On December 28, 1917, the President, by authority of the Act of Congress of August 29, 1916 (chapter 418, 39 Stat. 619, 645 [Comp. St. § 1974a]), took over the railroads of the country, including that of the complainant, and operated them through the Director General of Railroads until March 1, 1920, when pursuant to the Transportation Act of 1920, possession of them was restored to the companies owning them. During his operation, the Director General had increased wages and establised the rules and working conditions by what were called national agreements with national labor unions composed of men engaged in the various railroad crafts. Further demands by employees through such unions were presented to the Director General and were pending and undetermined when the Transportation Act was approved. Conferences were held between the heads of the labor unions, signatories to the national agreement, and representatives of the railroads after the railroads were restored to private ownership but without successful issue. When the members of the Labor Board were appointed and organized, April 15, 1920, it assumed jurisdiction of these demands and proceeded to deal with them. It rendered its decision as to the wage dispute on July 20, 1920, and postponed that as to rules and working conditions until April 14, 1921, when it decided that such rules and working conditions as were fixed in the so-called national agreements under the Director General and had been continued by the Board as a modus vivendi should end July 1, 1921, and remanded the matter to the individual carriers and their respective employees, calling upon them in the case of each railroad to esignate representatives to confer and decide so far as possible respecting rules and working conditions for the operation of such railroad and to keep the Board advised of the progress toward agreement. The Board accompanied this decision (No. 119) with a statement of principles or rules of decision which it intended to follow in consideration and settlement of disputes between the carriers and employees. The only two here important are sections 5 and 15, as follows:

'5. The right of such lawful organization to act toward lawful objects through representatives of its own choice, whether employees of a particular carrier or otherwise, shall be agreed to by management.

'15. The majority of any craft or class of employees shall have the right to determine what organization shall represent members of such craft or class. Such organization shall have the right to make an agreement which shall apply to all employees in such craft or class. No such agreement shall infringe, however, upon the right of employees not members of the organization representing the majority to present grievances either in person or by representatives of their own choice.' On June 27, 1921, the Board announced that some carriers in conference with their employees had agreed upon rules and working conditions and others had not. As to the latter the Board continued the old rules and working conditions until it should render a decision as to them.

In May, 1921, the officers of the Federal Shop Crafts of the Pennsylvania System, a labor union of employees of that system engaged in shop work, and affiliated with the American Federation of Labor, met the representatives of the Pennsylvania Railroad Company. They said they represented a majority of the employees of the Pennsylvania System in those crafts and were prepared to confer and agree upon rules and working conditions. The Pennsylvania representatives refused to confer with the Federation for lack of proof that it did represent such a majority, and said they would send out a form of ballot to their employees asking them to designate thereon their representatives. The Federation officers objected to this ballot because it was not in accordance with principles 5 and 15 of the Board, in that it made no provision for representation of employees by an organization, but specified that those selected must be natural persons, and such only as were employees of the Pennsylvania Company, and also because it required that representatives of the employees should be selected regionally rather than from the whole system. The result was that the company and the Federation each sent out ballots. The Federation then filed a complaint, under section 307 of the Transportation Act, against the Pennsylvania Company, complaining on behalf of its members directly interested of the company's course in respect of the ballots. The company appeared, a hearing was had and the Board decided (decision No. 218) that neither of the ballots sent out by the parties was proper, that representatives so chosen were not proper representatives, and that rules and working conditions agreed upon by them would be void. It further appeared that the votes cast on the company's ballots were something more than 3,000 out of more than 33,000 employees entitled to vote. The Federation had advised its members not to vote on the company's ballots. What the result was in the vote of the Federation ballots did not appear. The persons chosen by the 3,000 votes on the company's ballots conferred with the Pennsylvania Company's representatives and agreed upon rules and working conditions. The Board in its decision ordered a new election, for which rules were prescribed and a form of ballot was specified, on which labor organizations as well as individuals could be voted for as representatives at the option of the employee.

The company, on September 16, 1921, applied to the Board to vacate this decision on the ground that there was no dispute before the Board of which by title 3 of the Transportation Act the Board was given jurisdiction. After a hearing the Board declined to vacate its order, but said that it would allow the company to be heard on the question of the ratification of its shop craft rules by representatives of the crafts concerned when fairly selected.

Title 3 of the Transportation Act of 1920 bears the heading, 'Disputes between Carriers and Their Employees and Subordinate Officials.'

Section 301 makes it the duty of carriers, their officers, employees, and subordinate officials, to exert every reasonable effort to avoid interruption to the operation of an interstate commerce carrier due to a dispute between the carrier and its employees, and further provides that such disputes shall be considered and if possible decided 'in conference between representatives designated and authorized so to confer by the carriers, or the employees or subordinate officials thereof, directly interested in the dispute.' The section concludes:

'If any dispute is not decided in such conference, it shall be referred by the parties thereto to the board which under the provisions of this title is authorized to hear and decide such dispute.'

Section 302 provides for the establishment of railroad boards of adjustment by agreement between any carrier, group of carriers or the carriers as a whole, and any employees or subordinate officials of carriers, or organization or groups of organizations thereof. No such boards of adjustment were established when this controversy arose.

Section 303 provides for hearing and decision by such boards of adjustment upon petition of any dispute involving only grievances, rules or working conditions not decided as provided in section 301.

Sections 304, 305, and 306 provide for the appointment and organization of the 'Railroad Labor Board' composed of nine members, three from the Labor Group, three from the Carrier Group, and three from the Public Group.

Section 307 (a) provides that, when a labor adjustment board under section 303 has not reached a decision of a dispute involving grievances, rules or working conditions in a reasonable time, or when the appropriate adjustment board has not been organized under section 302, the Railroad Labor Board—

'(1) upon the application of the chief executive of any carrier or organization of employees or subordinate officials whose members are directly interested in the dispute, (2) upon a written petition signed by not less than 100 unorganized employees or subordinate officials directly interested in the dispute, or (3) upon the Labor Board's own motion if it is of the opinion that the dispute is likely substantially to interrupt commerce, shall receive for hearing, and as soon as practicable and with due diligence decide, any dispute involving grievances, rules, or working conditions which is not decided as provided in section 301.'

Paragraph (b) of the same section provides for a hearing and decision of disputes over wages.

Paragraph (c) makes necessary to a decision of the Board the concurrence of five members of whom, in the case of wage disputes, a member of the Public Group must be one. The paragraph further provides that:

'All decisions of the Labor Board shall be entered upon the records of the Board and copies thereof, together with such statement of facts bearing thereon as the Board may deem proper, shall be immediately communicated to the parties to the dispute, the President, each Adjustment Board, and the [Interstate Commerce] Commission, and shall be given further publicity in such manner as the Labor Board may determine.'

Paragraph (d) requires that decisions of the Board shall establish standards of working conditions which in the opinion of the Board are just and reasonable.

Section 308 prescribes other duties and powers of the Labor Board, among which is that of making 'regulations necessary for the efficient execution of the functions vested in it by this title.'

Section 309 prescribes that:

'An party to any dispute to be considered by an Adjustment Board or by the Labor Board shall be entitled to a hearing either in person or by counsel.'

Section 313 is as follows:

'The Labor Board, in case it has reason to believe that any decision of the Labor Board or of an Adjustment Board is violated by any carrier, or employee or subordinate official, or organization thereof, may upon its own motion after due notice and hearing to all persons directly interested in such violation, determine whether in its opinion such violation has occurred and make public its decision in such manner as it may determine.' Messrs. Frederic D. McKenney, of Washington, D. C., and T. J. Scofield, of Chicago, Ill., for appellant.

Mr. Blackburn Esterline, of Washington, D. C., for appellees.

Mr. Chief Justice TAFT, after stating the case as above, delivered the opinion of the Court.