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ELGIN, J. & E. RY. CO. v. BHD. OF RAILROAD TRAINMEN

June 21, 1961

ELGIN, JOLIET AND EASTERN RAILWAY COMPANY, PLAINTIFF,
v.
BROTHERHOOD OF RAILROAD TRAINMEN ET AL., DEFENDANTS.



The opinion of the court was delivered by: Perry, District Judge.

This matter coming on to be heard on the Verified Complaint and the Answers and Amendments thereto filed by defendants, and the Court having set the matter for hearing, having heard the evidence and the arguments of counsel, and being fully advised in the premises, the Court makes the following findings of fact and conclusions of law.

Findings of Fact

1. The jurisdiction of this Court is invoked by the plaintiff under the Constitution and laws of the United States, including the Judicial Code (28 U.S.C.A. §§ 1331 and 1337), the Railway Labor Act (45 U.S.C.A. § 151 et seq.) and the Interstate Commerce Act (49 U.S.C.A. § 1 et seq.). The amount involved in this controversy exceeds the sum of $10,000.00, exclusive of interest and costs.

2. Plaintiff is a corporation duly organized and existing under the laws of Illinois and Indiana. Its general office and principal place of business are located at 208 South La Salle Street, Chicago, Illinois. It is a common carrier engaged in interstate commerce by railroad, is a "carrier" within the meaning of that term as defined in the Railway Labor Act, and is subject to the provisions of that Act and of the Interstate Commerce Act.

3. Plaintiff owns and operates a railroad system in interstate and intrastate commerce which serves the industrial concentration of metropolitan Chicago, Illinois, where it has many miles of tracks. It has a substantial investment in railroad facilities, cars, and locomotives. It employs approximately 5,000 persons.

4. Plaintiff's railroad system is an integral part of the nationwide railway systems of the United States, and connects and interchanges freight with thirty-three common carriers by rail which enter the City of Chicago. Plaintiff renders important railroad service to thousands of shippers annually, and serves 600 or more industries for which the plaintiff provides terminal and switching facilities in the metropolitan Chicago area. Among these are the United States Steel Corporation, which owns the plaintiff.

5. The defendant Brotherhood of Railroad Trainmen (hereinafter called the BRT) is an unincorporated association with headquarters in Cleveland, Ohio. It is a labor organization, national in scope, and is subject to the provisions of the Railway Labor Act. The BRT is the exclusive collective bargaining representative for the class of approximately 1200 employees of plaintiff in service as Switchmen, Road Brakemen, Switch Tenders, Car Retarder Operators, and Yardmasters.

6. The defendant Brotherhood of Locomotive Firemen and Enginemen (hereinafter called the BLFE) is an unincorporated association with headquarters in Cleveland, Ohio. It is a labor organization, national in scope, and is subject to the provisions of the Railway Labor Act. The BLFE is the exclusive collective bargaining representative for the class of approximately 400 firemen employed by the plaintiff.

7. The defendant Order of Railway Conductors and Brakemen (hereinafter called the ORCB) is an unincorporated association with headquarters in Cedar Rapids, Iowa. It is a labor organization, national in scope, and is subject to the provisions of the Railway Labor Act. The ORCB is the exclusive collective bargaining representative for the class of approximately 55 road conductors of the plaintiff.

8. The individual defendants are joined as parties to this suit in their individual capacity, in their capacities as representatives of the aforesaid classes of employees of plaintiff, and in their capacities as members and as representatives of their respective labor organizations and the membership of such organizations. These individuals have a joint and common interest with, and can and do fairly and adequately represent said classes and members of defendants BRT, ORCB, and BLFE, employed by plaintiff, who are defendants in this action. These individuals are also officials of, and can and do fairly and adequately represent their respective defendant labor organizations and the memberships of such organizations.

9. The majority of the members of the BRT, ORCB, and BLFE, employed by plaintiff, and the majority of the aforesaid classes of employees of the plaintiff represented by said organizations, have an interest which is joint and common, and there are common questions of law and fact affecting their rights and the relief sought. They are too numerous to be made individual defendants herein and it is impracticable to bring them all before this Court.

10. The dispute between the parties concerns private non-contributory pensions supplemental to Railroad Retirement Act benefits. At the present time no pension plan is in effect covering retiring members of defendants BRT, ORCB, and BLFE now employed by plaintiff and retiring employees of the classes of employees of the plaintiff represented by the labor organizations; provided, however, that members of the BLFE who are working as engineers and who might now retire would obtain the benefits of the Pension Plan presently applicable to engineers. The most recent Plan (II-B) which heretofore covered members of said defendants and the classes of employees of plaintiff represented by said labor organizations expired by its terms October 31, 1959. The first non-contributory pension plan between the defendants, BRT, ORCB, and BLFE was for a 21-year period which expired October 31, 1957. That Plan, like the non-contributory Pension Plan which expired October 31, 1959, was included in the collective bargaining agreements between the plaintiff and each of the defendants BRT, ORCB, and BLFE on behalf of the respective, class or craft of the plaintiff's employees represented by such labor organization. Such employees who retired during. Plan II-B have continuously received and are now receiving Plan benefits with this exception: in a few instances increases received by employees under the Railroad Retirement Act have resulted in the elimination of all benefits received under Plan II-B. Since October, 1959, plaintiff has repeatedly offered and continues to offer voluntarily to extend Plan II-B for one, two, or three years, at defendants' election, to all persons presently employed by plaintiff who are represented by defendants BRT, ORCB, and BLFE, and for all persons formerly employed by plaintiff and formerly represented by said defendants who have retired since October 31, 1959. Such voluntary extension of existing Plans for prescribed periods has been accepted by all other labor organizations representing persons employed by plaintiff, 13 organizations in all. Defendants BRT, ORCB, and BLFE have rejected extension of pension coverage for such periods, but offered to make short extensions thereof.

11. Defendants BRT, ORCB, and BLFE now seek pension benefits different from and in addition to those available under Plan II-B. On October 1, 1959, pursuant to Section 6 of the Railway Labor Act, said defendants each served notice on the plaintiff proposing to add the following provision to the collective agreements then existing between the parties:

    "Kindly consider this as a thirty (30) day notice
  under the provisions of Section 6 of the amended
  Railway Labor Act to extend the current
  Non-Contributory Pension. Agreement [II-B] between
  the Elgin, Joliet and Eastern Railway Company and the
  [BRT, ORCB, and BLFE] effective November 1, 1957,
  until such date when the United States Steel Workers
  reach an agreement on a Non-Contributory Pension
  Plan, after which date, the above referred to
  Organization [s] shall have the option of
  substituting the new pension plan (being negotiated
  by the United States Steel Workers)in place of the
  pension plan now in effect covered by the
  aforementioned pension agreement; and/or also have
  the option to renew, modify, or

  change the above referred to pension agreement as may
  be deemed advisable."

The three defendant labor organizations requested joint handling of their notices, and this procedure was followed between the plaintiff and the three labor organizations in the collective bargaining conferences which followed.

12. In the collective bargaining conferences the carrier was represented by Paul H. Verd, its Vice President — Personnel, as its principal negotiator. Mr. Verd was authorized by the plaintiff at such conferences only to grant extensions of the existing pension agreement (Plan II-B) for periods of three years, two years, or one year, and he had no authority to grant an indefinite extension or an extension for less than one year. Mr. Verd lacked authority to approve any pension plan other than Plan II-B for any period whatever, and any other plan would have had to be a plan which would be approved both by the Board of Directors of the plaintiff and by the Board of Directors of the United States Steel Corporation. At the time of the Section 6 Notice on October 1, 1959 by the BRT, ORCB, and BLFE a strike was in progress by the employees of the United States Steel Corporation represented by the United States Steel Workers. That strike was settled about January 1, 1960, and a written memorandum of settlement included a statement of improvements to be made in the non-contributory pension plan in effect between the United States Steel Corporation and its employees represented by the United States Steel Workers. A revised form of the pension agreement itself was available prior to May 4, 1960. An adaptation of this latter plan for employees of railroads owned by the United States Steel Corporation was available in detail prior to July 29, 1960. Officers of the BRT, ORCB, and BLFE during the first six months of 1960 from time to time requested Mr. Verd to obtain copies of all of this material and to make it available to them for the purpose of collective bargaining conferences. Mr. Verd replied that he must wait for this material to be sent from the "East." Thereupon the officers of the defendant labor organizations themselves obtained copies of this material through their own sources, had it available, and offered it to Mr. Verd at a joint conference on July 29, 1960. Mr. Verd refused to accept the material or to bargain concerning it. At the joint conference had by the parties on November 30, 1960 officers of the BRT, ORCB, and BLFE had a complete copy of a proposed non-contributory pension plan based on the non-contributory pension plan then in effect between the United States Steel Corporation and its employees represented by the United States Steel Workers, which Plan is referred to as Plan II-CR. Copies of this Plan were offered to Mr. Verd but he refused to accept them or to discuss such a Plan with the defendants. Mr. Verd did not discuss the provisions of Plan II-CR until the joint conference of February 23, 1961, at which time he had obtained and had available copies of Plan II-CR.

13. During all of the collective bargaining conferences with the defendants Mr. Verd was of the opinion that he was not required by the Railway Labor Act to bargain with the employees of the plaintiff concerning the Pension Plan sought by the employees. However, he did in fact bargain upon said Plan and so did all of the defendants until final hearing herein.

14. During the collective bargaining conferences officers of the BRT, ORCB, and BLFE urged the plaintiff to restore or to increase benefits theretofore paid or being paid to employees of the plaintiff who had retired from the service of the plaintiff prior to the expiration of Plan II-B on October 31, 1959, but such discussions were not treated by the officers of the defendant labor organizations as collective bargaining under the Railway Labor Act. Neither the Section 6 Notices served by the labor organizations nor the strike ballots taken by them referred to retired employees. Officers of the BRT, ORCB, and BLFE never at any time threatened to strike against the plaintiff on account of the position of such retired employees. Mr. Verd never at any time advised the labor organization representatives that he was not required to discuss retired employees with them and, on the contrary, he discussed the position of such retired employees with the representatives of the defendant labor organizations.

15. The officers of the BRT, ORCB, and BLFE had full authority to negotiate to a conclusion the dispute with the plaintiff concerning the non-contributory pension plan which they sought. All of said defendants and the plaintiff have all bargained in good faith. They have simply been unable to reach an agreement.

16. After the third joint conference between plaintiff and defendants BRT, ORCB, and BLFE without reaching agreement, defendants requested that the National Mediation Board intervene. On August 22, 1960 the National Mediation Board advised that it had taken jurisdiction. Thereafter Mediators assigned by the National Mediation Board to the case from time to time met with the parties separately or jointly, but no settlement was reached. By letter dated March 8, 1961 the National Mediation Board proffered arbitration, which plaintiff accepted by letter dated March 9, 1961. On March 10, 1961 defendants BRT, BLFE, and ORCB jointly rejected arbitration. By letters dated March 13 and March 16, 1961, the National Mediation Board formally terminated its mediation services.

17. Further joint conferences were had between the parties on April 19, 21, and 24, 1961, but no settlement of the dispute was reached.

18. The National Mediation Board on May 16, 1961 sent telegrams to the plaintiff and to the Presidents of the BRT, BLFE, and ORCB as follows:

    "Washington DC 16 217P EDT 1961 May 16 P M 1 49 P R
  Verd, VP Pers Elgin Joliet & Eastern Railway Co 208
  South LaSalle St. Chgo
    "Re Case A-6317 EJ&E, BLF&E, "ORC&B and BRT. Board
  Is Informed Organizations Have Set Strike Date on
  EJ&E For 6 AM Saturday 5-20-61. NMB Has Determined
  That In The Public Interest Further Conferences
  Should Be Held Under Board's Auspices In This
  Dispute. NMB Therefore Requests BLF&E, ORC&B and BRT
  To Defer Strike Action As Above Stated Pending Such
  Conferences. Mediator Wallace Rupp Now In Chicago Is
  Prepared To Meet Parties Tomorrow 5-17-61. Your
  ...

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