of action by the House would constitute some presumptive evidence here. Senator MORSE. A kind of action by either House never carries a presumption with the chairman of the subcommittee. Mr. SCHOENE. I appreciate your correction, Mr. Chairman. Mr. SCHOENE. I would suppose, however, that action by the Senate that was unanimous, including your vote, might create a presumption. Senator MORSE. And you might even be mistaken then. Mr. SCHOENE. Since I have agreed to limit my oral presentation to approximately 30 minutes, I think with this brief introduction as to the provisions of the bill, I can now perhaps most usefully address myself to what I understand to be the position of the railroads on this matter. According to my understanding, that position has changed somewhat. When the bill was before the House, the railroad industry opposed the legislation completely. They said it was unnecessary, undesirable, and with respect to judicial enforcement raised some constitutional questions about it. As I understand from a memorandum that the railroad industry has been circulating amongst the Senators, the present position of the railroads is that they are in accord with the objectives of the legislation, but they propose two amendments which they say would improve and perfect the bill. One of the amendments deals with the question of judicial review. The railroads, according to the memorandum to which I have referred, now agree that the limited judicial function provided for in the bill is in accordance with that generally prevailing with respect to arbitration awards, and that is what the Railroad Adjustment Board is: It is in arbitration board. However, the railroads say that since the arbitration provided for with respect to grievances is, in effect, compulsory arbitration, at least compulsory in the sense that there is nowhere else to go with a grievance unless the parties set up a special board of adjustments, because it is compulsory, therefore, judicial review should be provided along the line of the Administrative Procedures Act. They don't explain just why it should follow that, because this is, in effect, compulsory arbitration that, therefore, a different judicial function is appropriate. But what interests me more than the failure of that explanation is the rather radical change in attitude that this position reflects. For some 23 years after the National Railroad Adjustment Board was established, we thought it was voluntary arbitration, that this simply afforded us a means to get before an arbitration tribunal as an alternative to the right to strike over grievances. But it was the railroad who, after 23 years, persuaded the Supreme Court that it was compulsory. At that time the judicial function was not in accordance with the Administrative Procedures Act. The railroads were getting a trial de novo in the court, but there was no judicial review to give any relief to the employee who lost the case. Apparently the compulsory nature of the arbitration process didn't bother the railroads with that kind of a system of judicial review. Furthermore, a couple of years ago the bill that became Public Law 88-108, where Congress applied compulsory arbitration the only time in history to the agreement-making process, that bill provided the same kind of judicial relief as is provided for in this bill, and the railroads supported that and didn't then suggest that because of the compulsory nature of the arbitration, review should be under the Administrative Procedures Act. This naturally makes you wonder why this change in attitude. I don't think we need to look very far for the explanation. Last December the Supreme Court decided the case of Gunther against San Diego & Arizona Eastern Railroad. There the Supreme Court held, contrary to what the lower Federal courts had been holding for 30 years, that a trial de novo in an enforcement proceeding was not permissible; that the award of the Board was binding on the courts and the courts could not substitute their judgment for that of the Adjustment Board. So although the railroads don't say so in their memorandum, what they are, in effect, asking this committee to do is to nullify the Gunther case and give a broader scope of judicial review to restore the opportunity for the courts to substitute their judgment for that of the arbitration board. What is wrong with that? The substitute provision or the amendment that the railroads suggest would, first, permit an award to be set aside if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. If not in accordance with law means not in accordance with the provisions of the Railway Labor Act, the bill provides for an award to be set aside for that reason. But the rest of the language, "arbitrary, capricious, and abuse of discretion," simply invites the courts to substitute their judgment for that of the Board, because traditionally the interpretation of contracts is considered a question of law. If the court disagrees with the Board's interpretation of the contract, it would, of course, say that the award is arbitrary or capricious, or not in accordance with law. The Supreme Court has pointed out many times that the National Railroad Adjustment Board is an expert board. It is composed of people who come from the industry, who understand collective bargaining contracts in the industry, and that their qualifications are superior to those of the Court's for interpreting and applying those agreements. Senator MORSE. Do you have those cases cited in your statement, Mr. Schoene? Mr. SCHOENE. Yes; I have. The next ground is that the award is contrary to constitutional right, power, privilege, or immunity. Of course, that sounds very attractive. Who wants the courts to do anything unconstitutional? But it is a bit fantastic in this context. I can't conceive an interpretation or application of collective bargaining agreements that would be unconstitutional if they stick to the requirements of the Railway Labor Act, which H.R. 706 would require them to do. But if you can conceive of their making an award they would infringe constitutional rights, there can't be a doubt in the world that any court that got its hands on it would set such an award aside regardless of what Congress says the courts should do, because Congress can't tell the courts that they should enforce unconstitutional awards. The third ground that they would seek review on is in excess of statutory jurisdiction, authority or limitation or short of statutory right, which seems to me a rather redundant way to say what H.R. 706 says, and that is that the award may be set aside if it is in excess of the jurisdiction of the Board. The next point also is that it would permit review on the ground it is without observance of procedure required by law. Well, the procedure required by law is set forth in the Railway Labor Act, and H.R. 706 provides that an award may be set aside if they fail to observe the requirements of the Railway Labor Act. But finally, they would have the courts review on the ground of substantiality of the evidence. Here, too, the judgment on the evidence of an expert board, the capacity to evaluate that evidence, is superior to that of the courts. Furthermore, if this meant judicially acceptable evidence, I don't suppose the board has ever rendered an award that could meet that test, because this board, like most arbitration tribunals, decides on the basis of written submissions of the parties, with oral argument permitted if it is requested, but in the sense of the kind of evidence that courts receive, no award they make would stand review. So we feel that this amendment that is offered by the carriers is without substance and purely for the purpose of restoring the situation in which courts would substitute their judgment for that of the Board. The second amendment that the railroads propose is to say that instead of the simple provision that we have in H.R. 706 requiring both parties to agree on a Special Board of Adjustment if either party asks for it, they would say that either the Adjustment Board itself could set up supplemental boards to clear up the docket and the backlog of cases, or the National Mediation Board, if it finds that the functioning of the Railway Labor Act is threatened, could then set up supplemental boards or would be required to do so if any division of the Adjustment Board is 2 years behind in its docket. I think the offering of such an amendment under which nobody could get any relief unless a division is over 2 years behind in its docket, the offering of such an amendment is symptomatic of a lot that is wrong in this industry. It indicates an attitude on the part of the railroads that a 2-year delay is tolerable. It wouldn't be tolerated in any other industry. I see arbitration awards on grievances in other industries right along and it is very seldom that I see an arbitration award involving a grievance that is more than a year old. They are nearly always disposed of in less than a year. There is no reason why they shouldn't be in the railroad industry. Furthermore, the notion that the only problem is the clogged docket again misses the point. We want expeditious adjustment of grievances, and these Special Boards of Adjusment, sitting down on the railroad, a single railroad with a single union, and one agreement in front of them, can sit down and dispose of grievances much faster than a national board can. So they would substitute for this expeditious kind of grievance disposition a cumbersome means of supplementing the national board rather than agree to the kind of board that many railroads agree to now. Our problem is that there are too many railroads that won't agree to it, but where they are used, they function very well. In discussing these amendments, I have not gone into any detail as to draftsmanship because I think on their face they do not justify adoption. But I would warn you that particularly on the amendment with respect to judicial review, there are some sleepers in it. The language undertakes, I believe, to resolve some controversial matters without purporting to do so. As I say, I haven't gone into any detail on that because I think the very substance of the proposed amendment, apart from any thought of draftsmanship, is such that it requires rejection by the committee. Senator MORSE. Counsel, would you file a supplemental memorandum setting forth any objections you have to the draftsmanship of the proposal? Mr. SCHOENE. I will do that if the subcomittee desires. (The memorandum referred to follows:) MEMORANDUM OF RAILWAY LABOR EXECUTIVES' ASSOCIATION ON LANGUAGE OF CARRIERS' PROPOSED SUBSTITUTE FOR SECTION 2 OF H.R. 706. At the initial hearing before the subcommittee on Friday, March 11, 1966, Mr. Lester P. Schoene, appearing on behalf of the Railway Labor Executives Association, discussed the language proposed by the railroads as a substitute for section 2 of H.R. 706, as passed by the House of Representatives, relating to review of awards of the National Railroad Adjustment Board. In that discussion, Mr. Schoene directed attention to the fact that in drafting their proposals the carriers had obviously sought to go beyond the scope and purposes of the House bill, and without any explanation or attempt at justification, were in fact proposing several changes in the existing statute not encompassed in the House version. At the request of the chairman of the subcommittee this memorandum is submitted by the association for the purpose of pointing out the more important aspects in which the carriers' drafting of their proposals would expand the scope and effect of the proposed amendments to the Railway Labor Act. Under section 3, first (p) of the present statute, actions to enforce awards of the National Railroad Adjustment Board may be brought either by the petitioner before the Board, or by “any person for whose benefit such order was made." The carriers' proposal would limit the right to bring such an action to “Any petitioner before the Adjustment Board." Under section 3, first (j) of the act, which would be unchanged by the currently proposed amendments, a petitioner before the Board may be an individual employee, a group of employees, a general chairman or other union officer, or a labor union. Under the carriers' present proposal, a union could not sue to enforce an award issued on the petition of an individual employee or employees; an employee could not sue if the union were the petitioner; nor could an employee not named as a petitioner before the Board, but who was part of a group or class of employees situated similarly to named petitioning employees, bring an action to enforce an award issued for his benefit. Thus the carriers' proposed language would in many instances operate to limit the scope and effectiveness of awards, place potential obstacles in the way of their enforcement, and require a multiplicity of proceedings before the Board where claims affected groups or classes of employees similarly situated. In proposing such a change in the present statute, the carriers are suggesting legislative action which would nullify a number of court decisions refusing to support objections raised by carriers in the past in an effort to defeat enforcement of awards.1 1 See, for example, the case of Kirby v. Pennsylvania R. Co., 188 F. (2d) 793, where the Court of Appeals for the Third Circuit rejected the contentions of the Pennsylvania RR. that a group of employees not individually named in the proceedings before the Board, but who were similarly situated to named claimants, could not sue to enforce an award. Another provision in the carriers' proposed substitute for section 2 of H.R. 706 designed to escape the impact of judicial ruling adverse to carrier contentions as to the proper interpretation of the existing statute, on subject matter foreign to the objectives of the proposed legislation, is their suggestion that section 3, first (p), be amended to include the following requirement: "The complaint shall be against the party or parties adversary to petitioner in the proceeding before the Adjustment Board and any party to whom notice has been given under paragraph (j) of this section." For many years the railroads have sought to prevent enforcement of awards of the Board on the grounds that they were issued without proper notice, under section 3, first (j) of the act, to persons other than the parties to the agreement in dispute before the Board who the carrier claimed were "involved" in the dispute, or that such allegedly involved parties had not been named as parties to the court action to enforce the award. The questions of the nature and extent of the involvement of such other persons and the propriety of their joinder in enforcement proceedings are now pending before the Supreme Court, which on February 21, 1966, granted a petition for a writ of certiorari seeking review of the decision of the Court of Appeals for the Tenth Circuit in The Order of Railroad Tel. v. Union Pac. Railroad Co., 349 F. (2d) 408. (No. 652, October term, 1965, sub nom. Transportation-Communication Employees Union v. Union Pacific Railroad Company.) The above-quoted language from the carriers' present proposal is plainly calculated to avoid the effects of an adverse ruling on the position taken by the railroad in the case now pending before the Supreme Court; and it would moreover greatly broaden and complicate the notice requirements of the present statute by bringing into these so-called "minor" labor disputes not just parties "involved" in the dispute as under the present act, but all parties whose position might be held to be "adversary" to the petitioner before the Board, whether or not it was a party required to receive notice under section 3, first (j). In the particulars discussed, as in the substitution of a "substantial evidence" type of court review for the final and binding effect presently accorded awards of the Board under Gunther v. San Diego & A. E. Ry. Co., No. 27, October Term, 1965, 60 L.R.R.M. 2496, the carriers' proposed substitute for section 2 of H.R. 706 seeks avoidance of judicial rulings on objections and obstacles by which the railroads have long sought to thwart enforcement of Adjustment Board awards. Moreover, as pointed out above, the language here discussed has been proposed without any discussion or explanation of purpose by the carriers. It is foreign to the objectives of the proposed legislation represented by H.R. 706, and like the other aspects of the carriers' proposed substitute legislation, would tend to defeat rather than support those objectives. Mr. SCHOENE. I think I have taken the time that I said I would take of the subcommittee, Mr. Chairman, and I appreciate this opportunity. Senator MORSE. I am not going to limit you in time. You may take the time required to present your case in full. Mr. SCHOENE. I should say also, Senator, that because of our desire to expedite the hearings, we have not gone into a mass of supporting evidence in support of the bill, but we have submitted to the subcommittee staff statements by H. C. Crotty, president of the Brotherhood of Maintenance of Way Employees, and who is chairman of our Railway Labor Act Committee of the Railway Labor Executive Association, and also a statement by Al H. Chesser, the national legislative representative of the Brotherhood of Railway Trainmen and Mr. Chesser's statement is accompanied by some substantial statistical exhibits. I would like permission of the committee to have those statements included in the record. Senator MORSE. The statements identified will be inserted in the record following Mr. Schoene's testimony. 60-573-66--3 |