The opinion of the court was delivered by: SHERIDAN
This is an action pursuant to the Railway Labor Act, 44 Stat. 577, as amended, 45 U.S.C.A. § 151 et seq. by plaintiffs, former employees of The Pennsylvania Railroad Company (Railroad), against the Railroad and against The Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees (Brotherhood), for damages for breach of the duty of fair representation, and for certain injunctive and declaratory relief. The court has jurisdiction of the subject matter and the parties.
This is the third action plaintiffs have brought in this court against the defendants. The first complaint, filed on March 26, 1959, was dismissed against the Brotherhood because plaintiffs failed to plead the exhaustion of their remedies within the Brotherhood or an adequate reason for failure to do so. Gainey v. Brotherhood of Railway & Steamship Clerks, E.D. Pa. 1959, 177 F. Supp. 421, aff'd 3 Cir. 1960, 275 F.2d 342, cert. denied, 363 U.S. 811, 80 S. Ct. 1248, 4 L. Ed. 2d 1153. The second complaint, filed on June 17, 1960, was dismissed against the Brotherhood for failure to plead hostile discrimination. Gainey v. Brotherhood of Railway & Steamship Clerks, E.D. Pa. 1961, 199 F. Supp. 477, aff'd 3 Cir. 1963, 313 F.2d 318. Both complaints were also dismissed against the Railroad. After the present action was started on February 19, 1963, the Brotherhood and the Railroad obtained a stay of proceedings until the plaintiffs paid the costs of the first two actions. Plaintiffs paid the costs to the Brotherhood, but not to the Railroad, and there have been no further proceedings against the Railroad. Subsequently, the Brotherhood filed a motion to dismiss the present complaint for a number of reasons, one of which was that "the complaint does not sufficiently allege bad faith or hostility toward the group for which plaintiffs purport to speak." By order filed on May 18, 1964, the late Judge Allan K. Grim denied the motion. In an accompanying opinion 230 F. Supp. 678 (E.D. Pa. 1964) Judge Grim concluded that the following paragraphs of the complaint, which were not pleaded in either of the prior actions, satisfied the requisite allegation of a breach of the duty of fair representation grounded on bad faith and ill will.
"The defendant union, contrary to the Railway Labor Act, is hostile toward the membership of the Philadelphia locals, where the bulk of the herein tallymen are located because of the latter's opposition toward the General Chairman and the staff of the union's System Board and the Internation [sic] President and the staff of the Grand Lodge of the union.
"The defendants acting individually and in concert by acts of omission and commission planned a course of conduct designed to discriminate against Eastern Region Tallymen so that their pay scale would be approximately twenty-five dollars a month less than tallymen employed in the Central Region of the carrier; and this discrimination was agreed upon as a means of punishing the plaintiffs and other members of the defendant union in the Eastern Region for their opposition to the union leadership; . . ."
The trial was to the court without a jury. Since plaintiffs' proof of damages obviously would involve protracted and extensive discovery and require testimony from an unusually large number of witnesses, only the issue of the Brotherhood's liability was tried. Rule 42(b), Fed. R. Civ. P.
Plaintiffs were tallymen employed at the Philadelphia Transfer Station (Philadelphia Transfer) in the Philadelphia Terminal Division, a part of the Railroad's Eastern Region, which generally included the stations East of Altoona, Pennsylvania. In 1937 the Brotherhood obtained the collective bargaining rights for their craft, which also included truckers and loaders. Plaintiffs' principal charges of discrimination are:
1. In 1941, the Brotherhood negotiated a wage agreement for Eastern Region tallymen based on hourly rates plus incentive pay. Tallymen in the Central Region (stations West of Altoona to Chicago) were on salary which netted them about $42.27 a month more, and, in addition, received vacation pay and sick leave, which were not payable to hourly rate workers.
2. In January of 1949, the Brotherhood served the Railroad with a Section 6 notice under the Railway Labor Act, together with a proposal for a new wage agreement which eliminated certain wage inequities between tallymen and truckers and loaders under the 1941 agreement, and then failed to seek an injunction when the Railroad terminated the existing agreement.
3. On April 18, 1950, the Brotherhood negotiated a new wage agreement for all tallymen in the Eastern Region and failed to enforce it.
4. The Brotherhood permitted the Railroad to close Philadelphia Transfer in June of 1952, thereby terminating the existing wage agreement, without seeking injunctive relief under the Railway Labor Act, which would have preserved the status quo pending negotiation, mediation, arbitration and Presidential intervention.
The Brotherhood is the largest of the railroad unions, representing crafts on more than 99 percent of the railroads in the United States and Canada. It adapts itself, geographically and organizationally, to the railroad so that it has a unit corresponding to each unit in the railroad. In 1950-52, the Brotherhood had 100 lodges of employees of The Pennsylvania Railroad. Each lodge had a Protective Committee headed by a chairman (local chairman). The members of Lodge 100, one of five lodges in the Philadelphia Terminal Division, were employees of Philadelphia Transfer. When there were two or more lodges in a division, the lodge chairmen elected a Division Chairman. The System Board of Adjustment, of which all Division Chairmen were members, elected the General Chairman, who since 1941 has been S.V.W. Loehr. The national headquarters of the Brotherhood, called the Grand Lodge, is at Cincinnati. The Grand President was George M. Harrison until he retired in 1963. He had a staff which in 1950-52 included two Vice Grand Presidents, F. H. Hall and G. B. Goble; Mr. Kinley, of the grievance and agreements section, and Mr. Crawford, counsel.
Grievances were adjusted at the lowest level of the ...