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Burlington Northern v. American Railway Supervisors Association

decided: December 11, 1975.

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



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division - No. 72 C 1775 WILLIAM J. BAUER, Judge.

Clark,*fn* Associate Justice (Retired), Cummings and Pell, Circuit Judges.

Author: Cummings

CUMMINGS, Circuit Judge.

Petitioner, Burlington Northern, Inc. (the Railroad), instituted this action seeking to set aside three awards of the National Railroad Adjustment Board, Fourth Division, handed down in favor of the American Railway Supervisors Association (the Union). The claims involved in these awards arose after the March 1970 merger of four carriers into this Railroad. As a result of the merger, the employees of the separate carriers became employees of the Railroad. Before the merger, the Union represented the craft or class of mechanical supervisors employed by the Chicago Burlington & Quincy Railroad (CB&Q), one of the component carriers. Prior to the merger, the CB&Q had entered into a Maintenance of Membership Agreement with the Union, providing in Section 1 that employees subject to the collective bargaining agreement between the CB&Q and the Union "shall, as a condition of their continued employment subject to said Agreement, become members" of the Union. Section 3 provided that "Upon receipt of a demand from the Association (Union) * * * that an employee's seniority as foreman be terminated for failure to pay the periodic dues, initiation fees or assessments, referred to in Section 1 hereof, the Carrier will cause such action to be taken within thirty (30) days from the date of receipt of such demand * * *."

On January 18, 1968, the Railroad, the component carriers, and six unions, including this one, entered into an Employees' Merger Protection Agreement. Section 8 of that Agreement provided that the Railroad would assume existing collective bargaining agreements "subject to changes in accordance with the provisions of the Railway Labor Act," and Section 9 provided for the arbitration of any dispute "with respect to the interpretation or application of any provision of this Agreement." See Burlington Northern, Inc. v. American Railway Supervisors Association, 503 F.2d 58, 61 (7th Cir. 1974).

After the merger, the National Mediation Board held a representation election pursuant to Section 2 Ninth of the National Railway Labor Act (45 U.S.C. § 152 Ninth) to determine the representative of the craft or class of mechanical supervisors employed by the Railroad. As a result of the election, the Union was denied certification. Consequently, the Railroad declined to bargain with the Union over changes in pay and working conditions under the pre-merger working agreements. In Burlington Northern, Inc. v. American Railway Supervisors Association, supra, this Court held that the dispute between the Union and the Railroad over the effect of the Employees' Merger Protection Agreement as to the Union's representation rights with respect to some of the Railroad's mechanical employees must be submitted to arbitration under Section 9 of that Agreement. 503 F.2d at 64. Before that decision was handed down, the Union submitted 40 claims to the National Railroad Adjustment Board, Fourth Division, seeking compliance with certain provisions in the pre-merger agreements between the Union and the CB&Q. Two of the claims sought enforcement of the Maintenance of Membership Agreement (Sections 1 and 3) as to employees F. A. Beffert and G. G. Ferrell. A third claim alleged that the Railroad had failed to bulletin notices of vacancies in mechanical department foreman positions in violation of Section 10(b) of the collective bargaining agreement. The remaining thirty-seven were monetary claims on behalf of employees.

The labor members of the Adjustment Board and Referee Weston held that under the Employees' Merger Protection Agreement, the Railroad was bound by the collective bargaining agreements that had been in effect between the CB&Q and the Union; accordingly the Board enforced the Maintenance of Membership Agreement with respect to Beffert and Ferrell in Awards 2714 and 2715. In addition, the Board found a violation of Section 10(b) of the collective bargaining agreement and ordered compliance with that provision in Award 2716. Based on its decision that the collective bargaining agreement between the CB&Q and the Union applied to the Railroad, the Board also rendered decisions favorable to employees on the remaining claims.

Subsequently the Railroad instituted this action to set aside the awards concerning Beffert and Ferrell, pursuant to Section 3 First (q) of the Railway Labor Act (45 U.S.C. § 153 First (q)), on the ground that the employees should have been given notice of the proceedings before the Adjustment Board. The lawsuit also attacked those two awards and Award 2716 on the ground that issues involving construction of the Employees' Merger Protection Agreement must be decided by arbitration under Section 9 of that Agreement.*fn1 The Railroad is paying the monetary claims of individual employees involved in the other thirty-seven awards in order to avoid further litigation. The Union counterclaimed for enforcement of the three contested awards pursuant to Section 3 First (p) of the Act (45 U.S.C. § 153 First (p), and in response the Railroad defended that Beffert and Ferrell are indispensable parties.

Citing Burlington Northern, Inc. v. American Railway Supervisors Association, supra, the district court denied the Railroad's motion for summary judgment and sustained the Union's counterclaim. About three months thereafter, the district court denied the Union's petition for an award of attorneys' fees of $8,565. The correctness of both orders is before us through the Railroad's appeal from the order enforcing the awards and the Union's cross-appeal with respect to the denial of attorneys' fees.

1. Failure to Give Notice to Beffert and Ferrell

The Railroad contends that Awards 2714 and 2715 are void because Beffert and Ferrell were not given notice of the Adjustment Board proceedings under Section 3 First (j) of the Railway Labor Act (45 U.S.C. § 153 First (j)), which provides in pertinent part that "the several divisions of the Adjustment Board shall give due notice of all hearings to the employee or employees and the carrier or carriers involved in any dispute submitted to them." The test whether an employee is involved in a dispute before the Adjustment Board should be a practical one, suited to the specialized function of the Board. See Elgin, Joliet & Eastern Ry. Co. v. Burley, 327 U.S. 661, 90 L. Ed. 928, 66 S. Ct. 721. "But in justice and fairness every person who may be adversely affected by an order entered by the Board should be given reasonable notice of the hearing." Hunter v. Atchison, Topeka & Santa F. Ry. Co., 188 F.2d 294, 300 (7th Cir. 1951), certiorari denied, 342 U.S. 819, 72 S. Ct. 36, 96 L. Ed. 619; Estes v. Union Terminal Co., 89 F.2d 768, 770 (5th Cir. 1937). The statutory requirement of notice incorporates this notion of due process: one will not be bound by a judgment when not afforded an opportunity to challenge it. See Allain v. Tummon, 212 F.2d 32 (7th Cir. 1954); Nord v. Griffin, 86 F.2d 481, 484 (7th Cir. 1936), certiorari denied, 300 U.S. 673, 81 L. Ed. 879, 57 S. Ct. 612. It therefore follows that an employee is involved in a dispute only when the Board's decision purports to adjudicate the rights or duties of the employee. Order of Railroad Telegraphers v. New Orleans, Texas & Mexico Ry. Co., 229 F.2d 59 (8th Cir. 1956), certiorari denied, 350 U.S. 997, 100 L. Ed. 861, 76 S. Ct. 548. However, no notice need be given where, because of the limited nature of the issues before the Board, the individual employee is not precluded from asserting rights personal to him in a subsequent proceeding.

The collective bargaining agreement "is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate * * * the collective agreement covers the whole employment relationship. It calls into being a new common law -- the common law of a particular industry or of a particular plant." Transportation-Communication Employees Union v. Union Pacific Co., 385 U.S. 157, 161, 17 L. Ed. 2d 264, 87 S. Ct. 369; United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 578-579, 4 L. Ed. 2d 1409, 80 S. Ct. 1347. When the parties disagree, the Adjustment Board is charged with interpreting this "common law." In this case, the Board was presented with the question: does the relationship between the Union and Railroad include a requirement that the Railroad direct employees to join the Union or lose their seniority? The Board was not called upon to decide whether these two employees could claim exemptions, under the agreement, to the Maintenance of Membership provisions.*fn2 As the Union concedes, the two awards require nothing of the employees; they are free to advance in a subsequent action either before the Board or an appropriate court any reasons why they cannot be compelled to join the Union. We hold, therefore, that the two employees need not be given notice in this case.

2. Failure to Make Beffert and Ferrell Parties to Counterclaim for Enforcement

Although not raised below, the Railroad now contends that the Union's counterclaim for enforcement of Awards 2714 and 2715 should have been dismissed for failure to join Beffert and Ferrell as indispensable parties. The Railroad admits that this question turns on whether Beffert and Ferrell were entitled to notice (reply br. 30). Because we hold that the employees ...


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