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Consolidated Rail Corp. v. American Train Dispatchers Association

decided: September 2, 1983.


Appeal from the United States District Court for the Eastern District of Pennsylvania.

Seitz, Chief Judge, Sloviter, Circuit Judge and Sarokin, District Judge.*fn*

Author: Seitz


SEITZ, Chief Judge.

The American Train Dispatchers Association (ATDA) appeals from an order of the district court vacating two awards of the National Railroad Adjustment Board, Third Division (NRAB), for want of jurisdiction in the Board, and enforcing a third award in which the NRAB found that it lacked subject matter jurisdiction over the claim. This court has jurisdiction to review the district court's order under 28 U.S.C. § 1291.


Faced with the possible cessation of freight railroad operations in the Northeast and Midwest following the bankruptcies of the Penn Central and six other railroads, Congress enacted the Regional Rail Reorganization Act of 1973 (RRRA), Pub. L. 93-236, 45 U.S.C. §§ 701 et seq. The RRRA reorganized the bankrupt carriers as the Consolidated Rail Corporation (Conrail) in order to ensure that freight service would continue to these key industrial regions. Title V of the RRRA, entitled "Employee Protection," defined Conrail's rights and obligations vis-a-vis the employees of the bankrupt carriers it had absorbed.

Pending the negotiation of new labor agreements with each of the many unions representing Conrail employees, section 504 of the RRRA provided that with a few exceptions the existing labor agreements would remain in force. 45 U.S.C. § 774. One such agreement was that signed in 1960 between the former Pennsylvania Railroad, now part of Conrail, and the ATDA. Section 3-G-1 of this agreement provided as follows with respect to Conrail's power to transfer employees:

When seniority or dispatching districts or parts thereof are merged or separated, not less than thirty (30) days' advance notice thereof will be given, in writing, by the Manager of Labor Relations to the General Chairman, and the manner in which the seniority of Train Dispatchers affected is to be exercised shall be adjusted by agreement, in writing, between the General Chairman and the Manager of Labor Relations.

The RRRA also gave Conrail certain powers to enable it to make the most efficient use of its employees. Section 503 of the RRRA gave Conrail "the right to assign, allocate, reassign, reallocate and consolidate work formerly performed on the rail property acquired pursuant to the provisions of this Act . . . ." 45 U.S.C. § 773. There is thus a potential conflict between section 503 of the RRRA and section 3-G-1 of the labor agreement because the statute does not require that Conrail give notice of pending transfers or agree in writing as to how the seniority of affected employees will be adjusted. Finally, section 507 of the RRRA provides that disputes concerning the "interpretation, application or enforcement" of title V, including section 503, may be submitted to binding arbitration. 45 U.S.C. § 777. Pursuant to this section, Conrail, the ATDA, and nine other labor unions in 1978 established Special Adjustment Board 880 (Special Board 880), its jurisdiction limited to title V disputes. The agreement establishing Special Board 880 was separate from the labor agreements between Conrail and the unions. In May of 1979 the agreement was re-executed, this time including as parties Amtrak and five additional unions. Neither version of the agreement provided a time limit on the Board's existence or a procedure whereby one or more parties could terminate the Board. The agreement does state that a party who has submitted a grievance to Special Board 880 may withdraw it at any time prior to the commencement of a hearing, and afterwards with the consent of the other party.

In October of 1976 Conrail notified the ATDA that it would shortly abolish three dispatching positions in Altoona, Pennsylvania, and transfer the work elsewhere, and that this action was being taken pursuant to section 503 of the RRRA. App. at 48. This was followed up by further letters and meetings in November and December, and the actual abolition and transfer of the positions took place on January 21 and 24, 1977. On January 24, the ATDA objected to Conrail's action on the ground that it violated section 3-G-1 of the labor agreement. Specifically, the union charged Conrail with not giving notice of the proposed changes and not agreeing in writing as to how the seniority of the transferred employees would be affected.

After exhausting the grievance procedures specified in regulation 7 of the labor agreement without resolving the disputes, the ATDA submitted claims on behalf of the three affected dispatchers to the NRAB, Third Division, pursuant to regulation 7 of the labor agreement and section 3, First of the Railway Labor Act (RLA), 45 U.S.C. § 153, First. Conrail responded before the NRAB that these were not disputes involving the labor agreement but were title V disputes, were covered by the arbitration provisions in section 507 of the RRRA, and should have been heard by Special Board 880 rather than by the NRAB. In all three cases the carrier and labor members of the NRAB became deadlocked, and two of the cases were referred to one referee and the third to another. In the two cases heard by referee Magnan the NRAB decided that it had jurisdiction and that Conrail had violated section 3-G-1 of the labor agreement. In the third case, the NRAB held that the claim was primarily a title V claim and that jurisdiction lay with Special Board 880 rather than the NRAB.

Both parties appealed to the district court, the ATDA seeking to enforce the first two awards and to vacate the third, and Conrail seeking to vacate the first two and enforce the third. Each party moved for summary judgment. The district court granted Conrail's motion, holding that the agreement between Conrail and the ATDA establishing Special Board 880 gave that board exclusive jurisdiction over title V claims. This appeal followed.

The ATDA presents two arguments to support its contention that the district court erred in holding that the NRAB lacked jurisdiction to hear the three claims. The union first argues that the three disputes should be characterized as involving section 3-G-1 of the labor agreement rather than title V of the RRRA, and thus could be referred only to the NRAB. Second, the ATDA argues that even if these were title V disputes, the NRAB nonetheless had jurisdiction to hear them and the district court ...

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