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Taylor v. Hudson Rapid Tubes Corp.

decided: June 27, 1966.

WILLIAM K. TAYLOR, APPELLANT
v.
HUDSON RAPID TUBES CORPORATION, APPELLEE



Kalodner, Chief Judge, and McLaughlin and Hastie, Circuit Judges.

Author: Kalodner

KALODNER, C.J.:

Did the District Court err in failing to give required consideration and effect to the National Railroad Adjustment Board's ruling that the plaintiff's contract of employment provided that he was to be "compensated in full" for his wrongful dismissal "without deductions for employment during the period of the wrongful dismissal and restoration to duty"?

That is the critical question presented by this appeal from the District Court's holding that "the plaintiff's award should be diminished by the amount of his earnings during the period [of his wrongful discharge]."

The relevant facts may be summarized as follows:

The plaintiff was discharged from his employment as a motorman on December 23, 1958 following an accident in which he was involved on December 14, 1958. At the time, the conditions of his employment or discharge were subject to a collective bargaining agreement between the Brotherhood of Locomotive Engineers and Herman T. Stichman, trustee in bankruptcy for the Hudson and Manhattan Railroad Company.*fn1 The agreement provided in relevant part, as follows:

Article IX B (1) -- "Employees covered by this Agreement shall not be disciplined, suspended or discharged without a fair and impartial investigation."

Article IX B (3) -- "If in the final disposition of the case the decision or award is in favor of the employee, he shall be reinstated with seniority unimpaired and shall be compensated, in full, for all time lost, if any, and the notation shall be removed from his record."

The plaintiff, after exhausting all available remedies open to him with his employer, petitioned the National Railroad Adjustment Board, First Division ("Board"), to hear the dispute, pursuant to the provisions of the Railway Labor Act, 45 U.S.C.A. § 153(i).*fn2 The Board held that he had not been accorded a fair hearing by his employer and ordered his reinstatement with back wages. During the period of his discharge, plaintiff had earned salary income as a church custodian and factory worker. On the issue as to whether this income could be set off against the back wages due, the Board construed the applicable provision of the collective bargaining agreement, above stated, as not requiring set off. In doing so it said:

"The Division also finds from the terms of the Agreement that the parties intended to award full compensation in situations of wrongful discharge as evidenced by the use of the words ' compensated in full.' We make this finding, mindful of the long controversy in this Division on the issue of ordering full compensation without deductions for employment during the period of the wrongful dismissal and restoration to duty. However, the words of the Agreement clearly indicate the remedy we must prescribe, if we are to give these words their usual and appropriate meaning. We make this finding in accordance with the terms of the Agreement, and without raising the issue as to what may be the weight of authority in this Division on this issue, or what is the applicable principle of common law pertaining to the minimization of damages, because they are not necessary for the determination of this case."

The defendant, Hudson Rapid Tubes Corporation, refused to comply with the Board's order and the plaintiff, pursuant to 45 U.S.C.A. § 153(p),*fn3 instituted enforcement proceedings in the District Court of New Jersey. The parties, prior to hearing, agreed to settle all issues except the question as to whether the defendant was entitled to a set off of the plaintiff's earnings during the period of his wrongful dismissal.*fn4

After hearing on the plaintiff's motion for summary judgment, the District Court held, without reference to the Board's opinion, that the defendant was entitled to a set off. In doing so it stated in its letter opinion dated May 26, 1965:*fn5

"The plaintiff's earnings must be set off from the total due him from the period of his discharge. No contrary intent can be gleaned from the Collective Bargaining provision alluded to by the plaintiff. See Odin v. Thompson, 85 F. Supp. 477 (N.D. Ala. 1949) and Louisville & Nashville R. Co. v. Brotherhood of Loc. Eng., 190 F. Supp. 829 (W.D. Ken. 1961), affirmed 297 F.2d 608 (6 Cir. 1961)."*fn6

The letter opinion made no reference to the Board's contrary determination in its Award that the collective bargaining agreement by its terms required "full compensation without deductions for employment during the ...


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