Pittsburgh Lake Erie Railroad Company v. Railway Labor Executives' Association/Concurrence Stevens

Justice STEVENS, with whom Justice BRENNAN, Justice MARSHALL, and Justice BLACKMUN join, concurring in part and dissenting in part.

Regulated utilities do not have the same freedom to respond to market pressures that unregulated firms have. They may not raise rates or cut services, for example, without permission from a regulatory agency. Most significantly for these cases, they may neither enter nor leave the market without agency approval. Ignoring this principle, the Court in Part II of its opinion arrives at a result that, while perhaps preferable as a matter of policy, contradicts our previous interpretations of the relevant statute.

The railroad industry long has been the subject of governmental regulation. A year after this Court held that individual States were powerless to regulate rail lines extending beyond their boundaries, Wabash, S.L. & P.R. Co. v. Illinois, 118 U.S. 557, 7 S.Ct. 4, 30 L.Ed. 244 (1886), Congress established the Interstate Commerce Commission (ICC) to regulate economic aspects of the rail industry. Interstate Commerce Act, 49 U.S.C. § 10101 et seq. (1982 ed. and Supp. V). Regulation of employment relationships within the rail industry followed, and in 1926, Congress enacted the Railway Labor Act (RLA), 45 U.S.C. § 151 et seq.

The intervening six decades were marked by relatively peaceful coexistence between the two statutes. During the course of the employment relationship, the RLA provided the means for resolving disputes. See ante, at 496, n. 4; Consolidated Rail Corporation v. Railway Labor Executives' Assn., 491 U.S. 299, 302-304, 109 S.Ct. 2477, 2479-2481, 105 L.Ed.2d 250 (1989). If a railroad sought to end that relationship by sale, consolidation, or abandonment, the ICC routinely conditioned approval on the railroad's acceptance of either job protection or some form of severance pay for employees who would be affected by the change. See United States v. Lowden, 308 U.S. 225, 60 S.Ct. 248, 84 L.Ed. 208 (1939). Cf. ante, at 498.

This symbiosis ended in 1985, when the ICC announced that it no longer would impose labor protective conditions on sales of short-line railroads unless exceptional circumstances were shown. Ex Parte No. 392 (Sub. No. 1), Class Exemption for the Acquisition and Operation of Rail Lines Under 49 U.S.C. 10901, 1 I.C.C.2d 810, 815 (1985), review denied sub nom. Illinois Commerce Comm'n v. ICC, 260 U.S.App.D.C. 38, 817 F.2d 145 (1987); see ante, at 498-501. Suddenly it became important for railroad unions to obtain such labor protections through collective bargaining. Unlike other employment contracts, however, rail labor agreements are altered not by periodic renegotiation but by notification, pursuant to § 6 of the RLA, 45 U.S.C. § 156, of a desire to change terms in the agreements. See Tr. of Oral Arg. 66-67. Thus it is not surprising that the unions in this litigation did not seek labor protective provisions until-just 18 months after the ICC abdicated its traditional protective role-plans to sell the railroad surfaced.

There is no disagreement that labor protective provisions related to the effects of an abandonment or sale may be the subject of collective bargaining. It follows, I believe, that when railway labor unions request the inclusion of such provisions in their collective-bargaining agreements by proper statutory notice, see ante, at 496-497, and n. 5, the employer must maintain the status quo during the statutorily mandated negotiating process or risk a strike as a consequence of its breach of that duty. See §§ 2 First, Seventh of the RLA, 45 U.S.C. §§ 152 First, Seventh. The Court adm ts the force of this proposition and acknowledges that an employer has some duty to bargain when a sale is announced. Ante, at 504, 512. Nevertheless, it indicates that this particular dispute did not obligate the railroad to preserve the status quo, for the Court would prohibit any bargaining that "in effect challenged the decision to sell," and would allow negotiations to cease as soon as the sale is closed. Ante, at 512. This diminution of the employer's duty contravenes two of our decisions interpreting the RLA.

In Railroad Telegraphers v. Chicago & N.W.R. Co., 362 U.S. 330, 80 S.Ct. 761, 4 L.Ed.2d 774 (1960), a railroad had decided, with the approval of state regulatory commissions, to abandon a large number of its local stations and thus remove several hundred station attendants from the payroll. This Court held that because the RLA "command[s] that employees as well as railroads exert every reasonable effort to settle all disputes 'concerning rates of pay, rules, and working conditions,' " the union had a right to strike to prevent the railroad from implementing the partial abandonment without bargaining over effects. Id., at 339, 80 S.Ct., at 766 (quoting § 2 First of the RLA, 45 U.S.C. § 152 First). The Court continued: "It would stretch credulity too far to say that the Railway     Labor Act, designed to protect railroad workers, was somehow      violated by the union acting precisely in accordance with      that Act's purpose to obtain stability and permanence in      employment for workers.  There is no express provision of      law, and certainly we can infer none from the Interstate      Commerce Act, making it unlawful for unions to want to      discuss with railroads actions that may vitally and adversely      affect the security, seniority and stability of railroad      jobs." 362 U.S., at 339-340, 80 S.Ct., at 766.

Telegraphers thus holds that if management decides to abandon a significant part of a railroad's business, the impact of that decision on employees' job security is a proper subject for bargaining under the RLA.

Detroit & Toledo Shore Line R. Co. v. Transportation Union, 396 U.S. 142, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969) (Shore Line ), concerned a railroad's proposal to make new work assignments, a change neither authorized nor prohibited by the collective-bargaining agreement. The Court held that once the union had served notice of its desire to bargain, the railroad was obligated to maintain the status quo until completion of the RLA's " 'purposely long and drawn out' " bargaining process. Id., at 149, 90 S.Ct., at 299 (quoting Railway Clerks v. Florida East Coast R. Co., 384 U.S. 238, 246, 86 S.Ct. 1420, 1424, 16 L.Ed.2d 501 (1966)). It further rejected the railroad's argument that the "status quo" encompassed only working conditions expressed in an agreement between the parties:

"[T]he language of § 6 simply does not say what the railroad     would have it say.  Instead, the section speaks plainly of      'rates of pay, rules, or working conditions' without any      limitation to those obligations already embodied in      collective agreements.  More important, we are persuaded that      the railroad's interpretation of this section is sharply at      variance with the overall design and purpose of the Railway      Labor Act." 396 U.S., at 148, 90 S.Ct., at 298.

The Court therefore construed "status quo" to mean "those actual, objective working conditions and practices, broadly conceived, which were in effect prior to the time the pending dispute arose and which are involved in or related to that dispute." Id., at 153, 90 S.Ct., at 301.

Today the Court proffers three reasons why Shore Line does not control these cases. First, it asserts that the Shore Line holding that "status quo" includes "conditions 'objectively' in existence when the union's notice was served" stretched the language of the statute "to its outer limits," ante, at 506. I am not at all sure that is true; even if it is, the holding is unambiguous and has the force of law. Second, the Court suggests that the fact that the work assignment changed in Shore Line had been in effect for many years justified an expectation "that it would not be changed without bargaining and compliance with the status quo provisions of the RLA." Ante, at 506. This effectively restates Justice Harlan's argument in dissent that while not limited to the terms of written agreements, the status quo obligation is limited to a change in settled practice. See Shore Line, 396 U.S., at 159-160, 90 S.Ct., at 304-305. The Court's emphasis on those dissenting remarks avails it nothing, because the instant controversy also arose out of a change in established procedure. By either a subjective or objective measure, therefore, it is reasonable to conclude that these employees' jobs are among the "working conditions" that must be preserved throughout the bargaining process.

Third, and most importantly, the Court points out that in contrast with these cases, the railroad in Shore Line had not proposed "to quit the railroad business, sell its assets, and cease to be a railroad employer at all," ante, at 507. The simple reply is that, in spite of claims of " 'managerial prerogative' " much like those advanced here, the Court in Tele- graphers y held that the effects of a railroad's decision to terminate a part of its business constituted a proper subject of bargaining. There is no relevant difference between the partial abandonment in Telegraphers and the transfer of ownership proposed in these cases: in both, rail service would continue as before, but many employees would lose their jobs.

Management's motive in Telegraphers, to cut costs by eliminating a large number of dispensable jobs, was of course perfectly reasonable. Thus when the Court held that the RLA required the railroad to bargain over the effects of the change, Justice Clark wrote:

"Today the Court tells the railroad that it must bargain     with the union or suffer a strike.  The latter would be the      death knell of the railroad.  Hence, for all practical      purposes, the Court is telling the railroad that it must      secure the union's approval before severing the hundreds of      surplus employees now carried on its payroll.  Everyone knows      what the answer of the union will be.  It is like the suitor      who, when seeking the hand of a young lady, was told by her      to 'go to father.'  But, as the parody goes, 'She knew that      he knew that her father was dead;  she knew that he knew what      a life he had led;  and she knew that he knew what she meant      when she said "go to father." ' "  362 U.S., at 343-344, 80      S.Ct., at 768 (dissenting opinion).

Had the sale in these cases proceeded, the railroad would have operated the same service with a work force of 250 as compared to 750 employees. Ante, at 495. The economic benefits of that reduction are as obvious as those that would have been achieved by closing obsolete stations on the railroad system in Telegraphers. It is just as obvious, I believe, that the RLA again commands bargaining. As Judge Becker noted in his opinion for the Court of Appeals:

"We are fully aware of the unfortunate ramifications and     irony of our decision.  A bargaining order, and a status quo      injunction, designed to foster conciliation, promote labor      peace, and ultimately keep the rails running, may ultimately      have the perverse effect of destroying the only chance P & LE      has for survival and perhaps even the very jobs that the      unions are now trying to protect.  Although we are not happy      with this result, we feel constrained to reach it, because      the Supreme Court has appropriately admonished the judiciary      not to apply its own brand of 'common sense' in the face of a      contrary statutory mandate." 845 F.2d 420, 446 (CA3 1988)     (citing TVA v. Hill, 437 U.S. 153, 193-195, 98 S.Ct. 2279,      2301-02, 57 L.Ed.2d 117 (1978)).

To evade the natural result of adherence to Shore Line and Telegraphers, the Court relies on two later opinions declaring that "an employer has the absolute right to terminate his entire business for any reason he pleases," Textile Workers v. Darlington Mfg. Co., 380 U.S. 263, 268, 85 S.Ct. 994, 998, 13 L.Ed.2d 827 (1965), and that the consequences of a partial closure are not a mandatory subject of bargaining, First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981). See ante, at 507-509, and n. 17. But those opinions interpreted the strictures that the National Labor Relations Act places on an unregulated industry. As we noted in First National Maintenance Corp., that is a situation far different from the RLA's governance of a regulated industry.

At issue today is the RLA's regulation of a railroad's freedom to leave the market. Perhaps the RLA's restrictions on that freedom, as interpreted in Telegraphers and Shore Line, do not best serve national transportation interests. But since Congress has not overruled those interpretations, it is, as Judge Becker observed, inappropriate for judges to undertake to fill the perceived policy void.

For these reasons, I would affirm the judgment of the Court of Appeals in No. 87-1888.