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January 30, 1962


The opinion of the court was delivered by: FREEDMAN

Plaintiff seeks a preliminary injunction. A hearing was held on the application on January 25th. At that time defendants filed a cross-motion for a temporary injunction against plaintiff.

The Facts

 The Pennsylvania Railroad Company operates in a thirteen-states area and the District of Columbia running from the Mississippi River to the Eastern Seaboard and from the Great Lakes to the District of Columbia. (N.T. 79.) Its shipments of industrial products and raw materials, as well as perishable foodstuffs, military supplies and mail, make its operations an extremely important factor in the functioning of this part of the country. On Friday, January 12, 1962, plaintiff's board of directors adopted a resolution authorizing its merger with The New York Central Railroad Company. (N.T. 41.) At the same time another resolution was adopted (P-1) authorizing the officers to file an application with the Interstate Commerce Commission for approval of the proposed merger. No such application has yet been filed. (N.Y. 41, 42.) A meeting of plaintiff's stockholders at which action is to be taken on the decision of the board of directors is scheduled for May 8, 1962. (N.T. 41.)

 Promptly on the announcement of the action of the board of directors, the defendants Michael Quill, Matthew Guinan and Eugene Attreed, on January 15, 1962, sent a telegram to the plaintiff stating that "The Transport Workers Union of America, AFL-CIO, vigorously protest the proposed merger" on the ground that it was "designed to promote the interest of the financial cliques who control both companies in complete disregard of the national welfare and the welfare of the 150,000 employees and their families." It gave this notice: "We solemnly warn you that we will resist to the limit of our capacity, including strike any merger deal which fails to provide ironclad protection of the job security and retirement rights of each and every employee on the seniority rosters of both railroads, their subsidiaries and affiliates. We demand that such ironclad protection be assured by you in writing immediately." (P-3) A joint reply by the presidents of both railroads was made in a telegram of January 17, 1962. It stated that the approval of the stockholders and of the Interstate Commerce Commission was necessary before any merger could take place and that this interval would provide "more than adequate time for an orderly consideration, under normal collective bargaining procedures, of proper protection for employes represented by the TWU and other unions who ultimately may be affected." It declared that "management will welcome the opportunity to meet with the TWU" after there had been developed the necessary facts regarding the organizational structure and plan of operation of the new company which would "permit an intelligent consideration of proper protective conditions by management and the TWU with respect to those employes represented by the latter * * * " (P-4). On January 20, 1962, at a press conference in New York the defendants, through Mr. Quill, announced a strike against both railroads to begin immediately after midnight on February 4, 1962. (N.T. 50.)

 It is clear that a strike by T.W.U. would have widespread effect on freight and passenger services in the thirteen states area in which the plaintiff operates and would cause plaintiff great losses of revenue. As the date of the threatened strike approaches the loss of business and revenue to the plaintiff will increase. (N.T. 88, 89.) The repercussions of a strike would also leave some lasting results, because not all the customers lost to plaintiff would be recovered after the strike had ended. That all this constitutes immediate and irreparable damage is quite plain and requires no discussion.

 The Law

 What is before us is a labor dispute of the most basic character. It is a collision between a giant employer and a union which represents employees who may lose their jobs as a result of the merger. The Norris-LaGuardia Act (29 U.S.C.A. §§ 101-105) bars in general all injunctions in labor disputes. Its theory is that the injunction of a court of equity is not an appropriate instrument for dealing with these sharp economic controversies between employers and employees in which the ultimate weapon of the union is a strike.

 The present case, however, does not deal with an ordinary employer and ordinary employees. It deals rather with an industry whose management and work force have been the objects of special Congressional concern and action, both because of the great capital and large number of workers involved, and also because of the vital public interest in its continued operations. Because of this concern Congress adopted the Railway Labor Act in 1926, as amended in 1934 (45 U.S.C.A. § 151 et seq.). By this statute industrial relations of railroad carriers were placed in a special category under a carefully designed plan, whose basic purpose is to avoid interruption of commerce by insuring both industrial peace and the bargaining rights of employees. Congress expressly declared this general purpose (See Railway Labor Act, § 2, 45 U.S.C.A. § 151a), and imposed the duty upon all carriers and employees "to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof." (Railway Labor Act, § 2. First, 45 U.S.C.A. § 152.) Provision was made for the resolution of disputes and grievances arising out of disputes and grievances arising out of existing collective bargaining agreements (known as "minor" disputes) through negotiation between the carrier and the collective bargaining representatives of the employees, with decision ultimately to be made by the Railroad Adjustment Board or the System Board or Adjustment established by the employer and the union jointly ( § 3, First (m), 45 U.S.C.A. § 153). Disputes arising from conflict over the negotiation of new provisions or matters outside of existing agreements (known as "major" disputes) are also dealt with in the statutory plan (45 U.S.C.A. § 156). As to these, Congress made clear two principles. One is that in such "major" disputes there must be negotiation and conciliation. The other is that the union may not be coerced into any agreement nor deprived of its ultimate right to strike. In effect, therefore, Congress declared that there should be no outbreak of economic warfare by way of strike before its detailed and elaborate procedures for negotiation and conciliation were first exhausted. Thus for "minor" disputes Congress established a compulsory system of adjudication by tribunals representative of both employer and employees. For "major" disputes it did not adopt a compulsory system of adjudication, but instead established channels for negotiation and conciliation whose use it made mandatory.

 The present controversy is a "major" dispute and under the statutory system the procedure which must be followed is this: a carrier or union which seeks a change in the collective bargaining agreement must give at least thirty days written notice for a conference, which must be held within the thirty day period. (Railway Labor Act, § 6, 45 U.S.C.A. § 156.) If the dispute is not adjusted by the parties in conference, either party may invoke the services of the National Mediation Board, and if its efforts to bring about an amicable settlement through mediation prove unsuccessful the Mediation Board must endeavor to induce the parties to submit their controversy to arbitration. If the parties do not agree to arbitration the Board must notify them that its mediatory efforts have failed and for thirty days thereafter no change may be made in the rates of pay, rules or working conditions or established practices in effect prior to the time the dispute arose (Railway Labor Act, § 5, 45 U.S.C.A. § 155). Finally, all else having failed, the Mediation Board is required, if in its judgment the dispute threatens "substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service", to notify the President who, in his discretion, may create an Emergency Board to investigate the facts and make a report to him within thirty days after its creation. For an additional thirty days after the creation of the Emergency Board and for thirty days after it has made its report to the President the parties to the controversy may make no change, except by agreement, in the conditions out of which the dispute arose (Railway Labor Act, § 10, 45 U.S.C.A. § 160).

 The Congressional purpose is therefore clear that the parties to a railway labor dispute must follow the statutory path. This statutory purpose has been authoritatively held to authorize the Federal Courts, notwithstanding the Norris--LaGuardia Act, to forbid by injunction either party to a railway labor dispute from turning away from the ordained channels for the mandatory adjudication of their "minor" disputes. Brotherhood of Locomotive Engineers v. Missouri-K.T.R. Co., 363 U.S. 528, 531, 80 S. Ct. 1326, 4 L. Ed. 2d 1435 (1960); Brotherhood of Railroad Trainmen v. Chicago River & Indiana Railroad Co., 353 U.S. 30, 39-42, 77 S. Ct. 635, 1 L. Ed. 2d 622 (1957); Baltimore & Ohio Railroad Company v. United Railroad Workers Division of Transport Workers Union of America, 271 F.2d 87, 92 (2d Cir.1959); Pennsylvania Railroad Company v. Transport Workers Union of America, 178 F.Supp. 30, 33 (E.D.Pa.1957). And while the authorities are not so numerous nor do they speak in the same emphatic terms, it is equally plain that Federal Courts have the authority and, indeed the duty, to enjoin resort to self-held before the parties have exhausted those processes of conciliation and mediation which Congress has established for "major" disputes. In such cases "[the] parties are required to submit to the successive procedures designed [by the Act] to induce agreement. * * * But compulsions go only to insure that those procedures are exhausted before resort can be had to self-help." Elgin, J & E.R. Co. v. Burley, 325 U.S. 711, 725, 65 S. Ct. 1282, 1291, 89 L. Ed. 1886 (1945). This also is the plain effect of the recent decision of our Court of Appeals in Pennsylvania Railroad Co. v. Transport Workers Union of America, 280 F.2d 343 (3d Cir.1960), affirming 191 F.Supp. 915 (E.D.Pa.1960). See also Norfolk & P.B.L.R. Co. v. Brotherhood of Railroad Trainmen, 248 F.2d 34, 44-45 (4th Cir.1957); Railroad Yardmasters of America v. Pennsylvania Railroad Company, 224 F.2d 226 (3d Cir.1955); American Airlines, Inc. v. Air Line Pilots Association, 169 F.Supp. 777, 787 (S.D.N.Y.1958).

 Whether the merger of these railroads is desirable and what consideration should be given to the effect of its consummation on the job security of the employees is a question of profoundly important economic and social policy and manifestly is of grave concern to the employees, but it not for us to decide. Congress has conferred the authority to make this decision upon the Interstate Commerce Commission. Section 5(2)(f) of the Interstate Commerce Act (49 U.S.C.A. § 5(2)) provides: "As a condition of its approval * * * of any [merger] involving a carrier or carriers by railroad * * * the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected." *fn1" See Brotherhood of Maintenance of Way Employes v. United States, 366 U.S. 169, 81 S. Ct. 913, 6 L.E.2d 206 (1961), where the subject was reviewed.

 We express no opinion on the merits of the controversy, which will be the subject of discussion in the negotiations between the parties and in the conciliatory function of the Mediation Board should they fail to arrive at an agreement between themselves.

 Defendants ask us to enjoin the plaintiff from submitting the merger proposal to its stockholders and from applying to the Interstate Commerce Commission for approval. We may not interfere with the jurisdiction of the Interstate Commerce Commission to pass upon the merger, a jurisdiction which Congress has conferred upon it. Nor may we prohibit the plaintiff from submitting the decision of its board of directors to its stockholders for their vote. The stockholders, as the owners of the corporation, may vote in favor of ...

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