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Burlington Northern Inc. v. American Railway Supervisors Association

decided: September 17, 1974.

BURLINGTON NORTHERN, INC., PLAINTIFF-COUNTERDEFENDANT-APPELLEE,
v.
THE AMERICAN RAILWAY SUPERVISORS ASSOCIATION, DEFENDANT-COUNTERPLAINTIFF-APPELLANT. BURLINGTON NORTHERN, INC., PLAINTIFF-COUNTERDEFENDANT-APPELLANT, V. THE AMERICAN RAILWAY SUPERVISORS ASSOCIATION, DEFENDANT-COUNTERPLAINTIFF-APPELLEE



Cross-Appeals from Orders from the United States District Court for the Northern District of Illinois, Eastern Division - No. 71 C 2002. William J. Bauer, Judge.

Clark, Associate Justice,*fn* Tone, Circuit Judge, and Campbell, Senior District Judge.

Author: Per Curiam

This appeal arises out of a labor dispute between Burlington Northern, Inc. and the American Railway Supervisors Association (ARSA). Plaintiff Burlington Northern seeks a judgment declaring that it has no obligation to bargain on any subject with defendant ARSA, or to treat ARSA as the representative of any of its employees. Additionally, plaintiff asks the court (1) to declare that, despite the arbitration provision of the Employees Merger Protection Agreement to which plaintiff and defendant are parties, it need not arbitrate this controversy with defendant, and (2) to enjoin ARSA and co-defendant National Mediation Board (NMB) from persisting in their attempt to obtain resolution of the dispute through the arbitration procedure set forth in that agreement. Defendant counterclaims, asking that plaintiff be required to submit to arbitration concerning the interpretation and application of the Employees Merger Protection Agreement according to the terms of that agreement, and for $1,000,000 in damages and reasonable attorneys' fees and costs.

The District Court granted summary judgment for defendants on the complaint, holding that the court lacked jurisdiction to decide what was essentially a representation issue within the exclusive jurisdiction of the NMB. Burlington Northern, Inc. v. American Ry. Sup'rs Ass'n, 350 F. Supp. 897, 904 (N.D. Ill. 1972). On the same basis, the judge also granted plaintiff's motion to dismiss defendant's counterclaim. Burlington Northern, Inc. v. American Ry. Sup'rs Ass'n, 359 F. Supp. 1047, 1049-1050 (N.D. Ill. 1973). We affirm although on other grounds, the court's dismissal of the railroad's complaint, but hold that plaintiff is required to proceed with arbitration under Section 9 of the Employees Merger Protection Agreement and therefore reverse the dismissal of defendant's counterclaim.

Plaintiff Burlington Northern, Inc. was formed on March 2, 1970 by the merger of the Chicago, Burlington & Quincy Railroad (CB&Q), the Great Northern Railway, the Northern Pacific Railway, and the Pacific Coast Railroad. The merged company has also leased the Spokane, Portland & Seattle Railroad. Each of the component railroads was -- and the Burlington Northern presently is -- a carrier subject to the Railway Labor Act, 45 U.S.C. §§ 151 et seq. The Interstate Commerce Commission (ICC) authorized the merger and lease pursuant to Section 5 of the Interstate Commerce Act, 49 U.S.C. § 5. Great Northern Pac. & B. Lines Merger, 331 I.C.C. 228 (1967), aff'd, United States v. United States, 296 F. Supp. 853 (D.D.C. 1968), aff'd, Northern Lines Merger Cases, 396 U.S. 491, 90 S. Ct. 708, 24 L. Ed. 2d 700 (1970).

Prior to the merger, the craft or class of mechanical supervisors employed by the CB&Q was represented by defendant ARSA, which had been certified as the representative of these employees by the NMB after a representation election held on August 19, 1944. No union represented the mechanical supervisors employed by the other merging railroads. The most recent collective bargaining agreement entered into between ARSA and CB&Q is dated March 1, 1970, one day before the merger, and was in fact finally negotiated and executed by Burlington Northern and ARSA on or about April 2, 1970, one month after the merger. This agreement provided for changes in rates of pay, rules and working conditions of employees represented by ARSA employed by the Burlington Northern and working on the segment of the railroad formerly operated by CB&Q. By separate agreement also dated March 1, 1970, and also finally negotiated and executed between ARSA and plaintiff Burlington Northern on April 2, 1970, plaintiff agreed to make regular monthly dues collections from certain employees represented by ARSA provided the employees authorized the deductions. Plaintiff complied with the provisions of these and the predecessor collective bargaining agreements with ARSA, and continued to settle employee grievances with ARSA for several months after the merger date.

The craft or class of technicians employed by the Great Northern before the merger was also represented by ARSA, which had received NMB certification to represent the Great Northern technicians after a representation election held on December 7, 1960. The technicians on lines other than the Great Northern were not represented by any labor organization.

Since the merger there has been no challenge by any other union or any employees to the right of ARSA to represent the mechanical supervisors on the segment of the merged railroad formerly operated by the CB&Q, or to represent the technicians on the segment formerly operated by the Great Northern. There is thus no dispute involving competing employee groups, as envisioned in 45 U.S.C. § 152 Ninth.

Before approving the merger the ICC, following the mandate of 49 U.S.C. § 5(2) (f), imposed upon the new carrier conditions that would take effect at the time of consolidation and would protect the employees of the component lines. Certain of these protective provisions were incorporated in an Employees Merger Protection Agreement agreed to on January 18, 1968. Both plaintiff and defendant ARSA, as well as each of the component rail lines and five other unions, were signatory to the agreement.

Section 8 of the agreement provides:

"The New Company [Burlington Northern] will take over and assume all contracts, schedules and agreements between said carriers and the labor organizations signatory hereto concerning rates of pay, rules governing working conditions, fringe benefits and rights and privileges pertaining thereto in effect at the time of consummation of the merger and will be bound by the terms and provisions thereof, subject to changes in accordance with the provisions of the Railway Labor Act, as amended, in the same manner and to the same extent as if the New Company had been a party thereto."

Section 9 provides, inter alia, that:

"In the event any dispute or controversy arises between the said carriers or the New Company and any labor organization signatory to this Agreement with respect to the interpretation or application of any provision of this Agreement . . . such dispute may be referred by either party to an arbitration committee for consideration and determination. . . . Should the members designated by the parties be unable to agree upon the appointment of the neutral member within ten days, either party may request the National Mediation Board to appoint the neutral member. . . ."

Commencing in the summer of 1970, several months after the merger, plaintiff refused to recognize and treat ARSA as the designated representative of either the mechanical supervisors formerly employed by CB&Q or the technicians formerly employed by the Great Northern. Plaintiff's repudiation of the ARSA collective bargaining agreements was apparently based upon the NMB's June 3, 1970 dismissal on the ground of mootness of a petition by technicians on the Great Northern seeking to invoke the jurisdiction of NMB under Section 2 Ninth. Plaintiff asserts that "it understood the NMB action to mean that the merger had terminated a separate existence of the Great Northern Technicians' bargaining unit." In responding to an inquiry as to whether the dismissal notice was intended to imply that ARSA was no longer the certified representative, however, NMB Executive Secretary Thomas A. Tracy stated on July 14, 1970 that its action did not "nullify or disturb any representation rights arising out of the certification issued" on December 7, 1960 declaring ARSA to be the representative of the Great Northern technicians. Moreover, in response to the affidavit (May 24, 1972) of the plaintiff's Vice President for ...


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