In order to enable management to freely transfer workers throughout the Penn Central system the Union executed an implementing agreement. This agreement established procedures for employee transfers and insured that the seniority rights of transferred employees would receive some protection. Significantly, however, the implementing agreement did not give local seniority districts any right to vote on proposed employee transfers. The Union also provided in Rule 3-B-2 of its 1970 Collective Bargaining Agreement for the revision of seniority districts by written agreement between representatives of the Union and management. Accordingly, under the 1970 Collective Bargaining Agreement the consent of the effected employees was no longer required in order to make seniority district changes. Thus by 1970 the power of management to unilaterally effect employees' seniority had been expanded considerably and the right of the Union rank and file to approve such actions had been reduced significantly.
All of these changes had taken place with the consent of the Union membership. Each of these agreements was ratified by the rank and file prior to taking effect. Moreover in return for these concessions the Union received an important commitment from management. In the merger protective agreement the Penn Central Transportation Company guaranteed these employees some measure of job security. Given the desperate financial position of the Railroad this was a significant concession by management, one which ultimately may have protected the jobs of many Penn Central employees. Thus we conclude that the plaintiffs have failed to show any clear industrial practice requiring ratification of agreements effecting employees' seniority at the time of this incident, November 1972.
Nor do we believe that the Union constitution mandated employee ratification of the November 1 agreement. Admittedly the constitution of the Transport Workers Union of America does generally call for employee ratification of collective bargaining agreements. (Plaintiffs' Ex. 3, Art. XXV Section 2). It is clear that the November 1 accord was never submitted to the Union membership for their approval. Nonetheless we believe that the Union was acting within the scope of its authority under the constitution when it entered into this agreement.
The November 1 agreement was the direct product of several other collective bargaining agreements, each of which was duly ratified by Union membership. Taken together these agreements conferred on the Union and management the authority to transfer workers and change seniority rosters without the prior consent of the effected employees. Through these agreements the rank and file effectively delegated to management and union leadership the power to change seniority rosters. Since each of these agreements was entered into with the consent of the Union membership, we feel that they are consistent with Article XXV, Section 2 of the Union constitution. Therefore the delegation of authority accomplished by these agreements does not in our view offend the Union constitution.
Together the merger protective agreement, the implementing agreement and the 1970 Collective Bargaining Agreement provide the framework for all of the actions taken by the Union and management in the fall of 1972. These agreements allow management to close some of its operations and transfer employees to other jobs within the Penn Central system. They provide for the dovetailing of seniority when any employees are so transferred. They also authorize the revision of seniority rosters by agreement between representatives of labor and management. Therefore, the actions taken by these defendants in the fall of 1972 are wholly consistent with the existing collective bargaining agreements, agreements which were duly ratified by membership.
Despite this fact the plaintiffs now complain that the November 1 agreement improperly denied them their accrued seniority rights because it was not submitted to them for ratification. We disagree. The plaintiffs have no absolute right at federal law to demand that all agreements between the Union and management be submitted to the membership for ratification. Rather membership ratification is necessary only when such ratification is required by the agreement itself or by the constitution, by-laws or rules of the Union. See Confederated Independent Unions v. Rockwell Standard Co., 465 F.2d 1137, 1140 (3d Cir. 1972). Moreover, it is clear that "it is legally permissible for a Union to forego ratification of a collective bargaining agreement by its membership." Aikens v. Abel, 373 F. Supp. 425, 435 (W.D. Pa. 1974). Therefore the Union can change its internal policy regarding contract ratification and forego such ratification when necessary or appropriate.
In this case we believe that the Union, with the consent of its membership, did agree to forego ratification of all agreements dealing with modification of seniority districts. By November 1, 1972 the Union membership had delegated to its leadership the power to enter into such agreements without prior ratification. This delegation of authority was accomplished by the 1970 Collective Bargaining Agreement and was done in a manner consistent with the Union constitution. Similarly by 1972 the rank and file had ratified a series of agreements which gave management the authority to unilaterally close its operations and transfer employees throughout the Penn Central system. Again this delegation of authority was accomplished in a manner that comported with the requirements of the Transport Workers Union's constitution.
Thus management could have accomplished the same result in this case by simply closing the Eastbound Shop and arbitrarily transferring these employees to the Altoona Heavy Repair Shop. If management had elected to take this action without conferring with the Union the plaintiffs would have been in precisely the same situation. They would have had to choose between transferring to the Altoona shop or bidding on jobs in the Westbound District. Furthermore had management acted unilaterally there could be no argument that its conduct violated the Union constitution.
Given this prior delegation of authority by the union rank and file we conclude that ratification of the November 1 agreement was no longer required by the Transport Workers Union's constitution. Accordingly we hold that that agreement was not invalid for failure to obtain such ratification.
Finally, we believe that the plaintiffs have failed, on this record, to carry their burden of proof on the question of unfair representation by either the Union or the Railroad. In this case the Transport Workers Union, and its Local 2017, were the exclusive bargaining representatives of the carmen working in the Altoona area. This relationship, which is created and defined by statute, imposed certain responsibilities on the Union. Foremost among these was the duty to fairly and impartially represent the interests of the rank and file to management. Vaca v. Sipes, 386 U.S. 171, 177, 17 L. Ed. 2d 842, 87 S. Ct. 903 (1967); Humphrey v. Moore, 375 U.S. 335, 342, 11 L. Ed. 2d 370, 84 S. Ct. 363 (1964); Medlin v. Boeing Vertol Co., 620 F.2d 957, 961 (3d Cir. 1980). This duty of fair representation is a logical incident of the Union-Employee relationship and precludes the Union from dealing with its membership in a manner which is either arbitrary, discriminatory, or in bad faith. Gainey v. Brotherhood of Railway & Shipping Clerks, 313 F.2d 318, 322 (3d Cir. 1963). This duty is a strict obligation; one which extends to all aspects of the Union's activity on behalf of its membership, including negotiations related to employee seniority. Hardcastle v. Western Greyhound Lines, 303 F.2d 182, 185 (9th Cir. 1962); Smith v. B&O Railway, 485 F. Supp. 1026 (D.C. Md. 1980).
The duty of fair representation does not, however, narrowly proscribe the actions which a Union may take in pursuing the interests of its members. Quite the contrary, the law recognizes that labor unions, like many large organizations, are made up of many diverse interests, each of which has its own narrow perspective. Inevitably the interests of these different constituent groups are going to come into conflict. Ultimately when these conflicts arise the Union leadership is going to have to reconcile these various competing interests. Because reconciling these interests necessarily involves rejecting some points of view, the Union must be allowed broad discretion in dealing with its membership. See, Hardcastle v. Western Greyhound Lines, 303 F.2d 182, 185 (9th Cir. 1962). Accordingly it is clear that a Union may, consistent with the duty of fair representation, adopt a position contrary to that held by some of the individuals whom it represents. See, Ford Motor Co. v. Huffman, 345 U.S. 330, 97 L. Ed. 1048, 73 S. Ct. 681 (1953). Thus the mere fact that a Union adopts a policy which is detrimental to the interests of some employees does not by itself establish a breach of the duty of fair representation. Rather the Union's duty to fairly represent its members is breached only when the Union's actions are arbitrary or discriminatory or when those actions are taken in bad faith.
In this case we do not believe that the course followed by the Transport Workers Union and its representatives was in any way arbitrary or discriminatory. Nor do we feel that the Union acted in bad faith when it entered into the November 1 accord. In the fall of 1972 the Transport Workers Union was confronted with a management decision to close the Eastbound Car Repair Shop and to convert that facility to a programmed repair plant. At that time the Union recognized that, given the collective bargaining framework then existing between the parties, management had the authority to take this action unilaterally. The Union also recognized the one consequence of the closing of the Eastbound plant would be the surplussing of some of the employees working there. Under the merger protective agreement these men, once surplussed, could be transferred to any job in the Penn Central system.
The Union therefore acted to protect the interests of these employees as best it could. Union officials extracted from management a commitment that any workers surplussed as a result of this plant closing would be transferred to the Altoona Heavy Repair Shop. Thus none of these surplussed men would be assigned to jobs far removed from their homes. Nor would any of these men lose their accrued seniority in the Eastbound District. That seniority would be dovetailed into the seniority roster of the Altoona Heavy Repair Shop. Therefore, with respect to the 20 men surplussed as a result of the closing of the Eastbound Shop the Union protected their interests completely.
As for the remaining men at the Eastbound Car Repair Shop, they were given the option of bidding on jobs at the Madden Shop in Hollidaysburg, Pennsylvania. All of these men were able to obtain work at the Madden Shop, work which was substantially the same as that they had previously performed. Some were able to work on the wreck train crew, a job which allowed for substantial overtime pay. None was required to take a job far from his home. None was furloughed by the railroad.
Admittedly these men did suffer some diminution of their seniority rights as a result of this change in employment. The Madden Shop was located in the Westbound Seniority District. When these men bid on jobs at the Madden Shop their names were placed at the bottom of that shop's seniority roster. However, by the fall of 1972 there was no action which the Union could have taken to protect the seniority rights of these men. Two years earlier, in 1970, these employees had ratified a prior rights agreement which provided for the end-tailing of seniority when employees transferred between the Eastbound and Westbound Seniority Districts. Accordingly the loss of seniority which these men felt in November of 1972 was a direct result of the prior rights agreement and not any wrongdoing by the Union leadership.
In sum, as a result of the Union's efforts in the fall of 1972, all of the men formerly employed at the Eastbound Car Repair Shop remained on the job with the Railroad. All of these men were able to obtain work in and around the Altoona area. None of these men had to accept a cut in wages. None was furloughed. While some did suffer a diminution of their seniority rights, as a practical matter, this had little or no effect on their employment with the railroad. Moreover, this diminution of seniority was not the result of arbitrary bad faith conduct by the Union. Rather it was the product of an agreement ratified by the Union membership some two years prior to the closing of the Eastbound plant.
In the face of this record we can find no basis for the plaintiffs' allegation that the Unions and their officers breached their duty to fairly represent the employees at the Eastbound car repair shop. Accordingly, the plaintiffs' claims against the defendant Unions and their officers must be dismissed.
Finally on this record we can find no factual basis to support the plaintiffs' allegations against their employer, Penn Central Transportation Company.
The plaintiffs' claims against the Railroad proceed on a slightly different basis than those asserted against the Unions. The plaintiffs do not allege that the Railroad, by itself, directly violated the duty of fair representation. Rather, throughout these proceedings the plaintiffs have contended that the Railroad conspired with the Union to improperly strip the men working at the Eastbound Car Repair Shop of their accrued seniority. As we perceive it this allegation requires proof of two elements. First, plaintiffs must demonstrate that the Union's actions violated the duty of fair representation by improperly denying these men their accrued seniority. Second, plaintiffs must show that the Railroad conspired with representatives of the Union to achieve this result.
Plaintiffs' proof of these two elements rests on their contention that the Railroad knew that union representatives were not authorized to enter into the November 1 agreement at the time that agreement was signed. See, Goclowski v. Penn Central, 571 F.2d at 759. This contention is the very crux of the plaintiffs' case against the Railroad. Yet we find no factual support for this contention.
At the hearings held before this court, representatives of both the Railroad and the Union testified that they believed the Union to be fully authorized to enter into the November accord. These individuals believed that the 1970 Collective Bargaining Agreement gave the Union the power to modify seniority districts by agreement with management. They also considered the closing of the Eastbound Shop to be a decision entrusted exclusively to management. Finally they recognized that the closing of this shop could impose significant hardships on the 33 men currently working there. Therefore these men concluded that the Union had both the right and the duty to protect the employees at the Eastbound Shop by entering into this accord.
We find the testimony of these witnesses to be credible. Moreover we feel that the opinions expressed by these men are consistent with both the text of the relevant collective bargaining agreements and past industrial practice. At no time in these hearings have the plaintiffs presented competent evidence from which we could infer that responsible Railroad officials acted in concert with the Union to deny these men their seniority. Rather, the record clearly demonstrates that the November 1 accord was the result of a unilateral management decision. Since the plaintiffs have failed to demonstrate any wrongful conspiracy by the Railroad their claims against Penn Central must be dismissed.