Order of Railroad Telegraphers v. Chicago & North Western Railway Company

PETITIONER:Order of Railroad Telegraphers
RESPONDENT:Chicago & North Western Railway Company
LOCATION:Fleetwood Paving Co.

DOCKET NO.: 100
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 362 US 330 (1960)
ARGUED: Mar 01, 1960 / Mar 02, 1960
DECIDED: Apr 18, 1960

Facts of the case

Question

  • Oral Argument – March 02, 1960
  • Audio Transcription for Oral Argument – March 02, 1960 in Order of Railroad Telegraphers v. Chicago & North Western Railway Company

    Audio Transcription for Oral Argument – March 01, 1960 in Order of Railroad Telegraphers v. Chicago & North Western Railway Company

    Earl Warren:

    Number 100, the Order of Railroad Telegraphers et al, Petitioners versus Chicago and North Western Railway Company.

    Mr. Schoene.

    Lester P. Schoene:

    If the Court please, this case is here as a result of this Court’s order of October the 12th, 1959, granting a petition for a writ certiorari to the United States Court of Appeals for the Seventh Circuit.

    That judgment reversed the judgment of the District Court for the Northern District of Illinois, which had denied a permanent injunction against a strike and have dismissed the complaint.

    The attempted strike arose out of a union’s proposal under the Railway Labor Act to amend the existing agreements to include a rule, providing that no position in existence on December 3rd, 1957, will be abolished or discontinued except by agreement between the carrier and the organization.

    The opinion of the court below, goes into considerable discussion of the facts which we believe to be largely irrelevant and I think its holding can be readily summarized by a few quotations, beginning on page 382 of the record where the Court of Appeals’ opinion appears, it actually begins a few pages earlier than that on page 377 of the record.

    With respect to the proposal that I have quoted, the Court of Appeals said on page 382, “Certainly, the Railway Labor Act does not divest a carrier of the right to manage and control the administrative functions of its business enterprise and conduct its business operations without exercise of a veto power by the union.”

    Here, the union is demanding such veto power over the abolition of any position in existence on December 3rd, 1957.

    The union is attempting to obtain through the collective bargaining processes through Railway Labor Act that which would prohibit North Western from complying with the orders of the South Dakota Public Utilities Commission and the Iowa State Commerce Commission.

    In short, this is an attempt by the union to erogate to itself the prerogatives that have been traditionally and rightfully managements while at the same time assuming none of the corresponding burdens and responsibilities.

    Then turning to page 384, near the bottom of the page, the Court in further substantiation of that holding sirs, we see no material difference between the Howard case and the case before us, the reference to the Howard case is of course to the decision of this Court in Brotherhood of Railroad Trainmen against Howard at 343 U.S. 768.

    And then on page 385 of the record, the Court says, “We therefore hold that such a demand thus here made by the union is completely outside the ambit of rates of pay rules and working conditions as those words are used in the Railway Labor Act and cites the North Shore case and hence, is not within the scope of mandatory bargaining.

    Therefore, the terms of the Norris-LaGuardia Act are here inapplicable.

    In further support, the Court relied on this Court’s decision last term in the Borg-Warner case.

    Now the – with this holding, the Court disposed off a number of issues that were not specifically considered.

    As you will note from reference to the petitioner’s brief, pages 14 to 15, there are a considerable variety of issues embraced in this case, all of which are disposed out by the Court’s determination that a permanent injunction against the strike should have been issued by the District Court.

    Now, in the course of the development of this case, there have been so many instances in which by taking facts out of context.

    William J. Brennan, Jr.:

    Did you raise the jurisdictional question on the diversity issue below?

    Lester P. Schoene:

    No we did not, but the basic jurisdictional question is raised here for the first time.

    William J. Brennan, Jr.:

    May we hear you on it?

    Lester P. Schoene:

    Yes, I would —

    William J. Brennan, Jr.:

    I mean, are you entitled to be heard?

    Lester P. Schoene:

    I beg your pardon?

    William J. Brennan, Jr.:

    Are you entitled to be heard on it?

    Lester P. Schoene:

    Yes, I think so.

    I think the question of jurisdiction might arise at any time.

    Felix Frankfurter:

    What if — would you mind stating what you deem the basic jurisdictional question?

    Lester P. Schoene:

    Yes, the — the jurisdiction on the Court would’ve — of the District Court was invoked on the theory that rights were being claimed under the Constitution and laws of the United States.

    At the time that the complaint was filed, at least the part of the complaint seemed to have similarities to Chicago River — Brotherhood of Railroad Trainmen against the Chicago River Railroad and it seemed at point to present his sufficient claim of federal right.

    There was never any jurisdictional claim on any other head of jurisdiction, but as the case has proceeded the nature of the federal right claim has seemed to us to become more and more vague until we felt compelled to bring to the attention of this Court that in the present posture of the case, there appears to be a basic lack of federal jurisdiction.

    William J. Brennan, Jr.:

    You mean —

    Lester P. Schoene:

    I — I’m going to tackle that —

    William J. Brennan, Jr.:

    Meaning that they can’t prove diversity and therefore —

    Lester P. Schoene:

    That’s a — the federal right is not sufficient to support federal jurisdiction.

    Tom C. Clark:

    Well diversity was not alleged?

    Lester P. Schoene:

    Diversity was not alleged.

    Now, the — I — I say the — the federal jurisdiction was claimed only on the basis of a claim under the constitutional laws of United States.

    Now there have been so many —

    William J. Brennan, Jr.:

    This was left open in the Toledo case, was it?

    Lester P. Schoene:

    That — that is exactly the point that was left open in the TP&W case and discovery incidentally, I must apologize for the fact that I have overlooked that fact in courts below and it came to my attention in the course of the preparation of petition for certiorari in this Court and therefore the question was raised.

    As I said the taking effects out of sequence, out of context and drawing inferences form them has lead I believe to a considerable degree of confusion as to what the facts actually were and how this controversy arose and I believe that I can be of greatest assistance to the Court if I first take a little time, in fact a fair amount of time to review in some details the actual sequence of the events that lead to this controversy and this litigation.

    Felix Frankfurter:

    You — you do that I take it because you think that will make clearer the jurisdictional problem?

    Lester P. Schoene:

    Well, it will include the jurisdictional problem but I think it is necessary for the understanding of any of the issues in the case that the Court —

    Felix Frankfurter:

    All right.

    I put my question because usually, I like to refresh my mind first it was so clear that there’s no jurisdiction.

    Is that a good reason for not starting with that.

    That’s why I assumed that I —

    Lester P. Schoene:

    I — I don’t — I don’t think it’s completely clear, Mr. Justice.

    Felix Frankfurter:

    All right.

    Lester P. Schoene:

    I think this is in one of these vague areas in which I’m not quite sure of what the holdings of this Court indicate.

    Now, this controversy began when on December the 23rd, 1957, the union, pursuant to Section 6 of the Railway Labor Act served a formal notice on the carrier in which it proposed to amend the existing agreement by including the rule which I have already quoted that is that, “No position in existence on December 3rd, 1957, will be abolished or discontinued except by agreement between the carrier and the organization.”

    Now, prior to that date, and since Mr. Ben Heineman had taken over the management of the railroad in — on April the 1st, 1956, approximately a year-and-half before, the total employment had been reduced from 26,000 approximately to approximately 18,000.

    And that reduction in employment had included some 100 positions of the telegrapher’s class other than the station agency positions.

    Also, the Railroad had applied on November the 5th, 1957 to the South Dakota Public Utilities Commission for permission to close 69 stations in South Dakota or alternatively, if it proved feasible to close 53 stations and enlarge the agents’ assignments at 16 others to include limited service at the closed stations.

    Hearings in South Dakota had not then concluded.

    Now, you may wonder why I’m diverting to the proceedings in South Dakota, the reason is that throughout this case, the carrier, the railroad has taken the position that actually this strike was not motivated by the refusal of the carrier to bargain under Section 6 proposal, but was really a protest against the railroad station agency problem and was in protest or for the purpose of frustrating orders of state commissions.

    Therefore, I think it is important that the Court have in mind that at the time this proposal was made, over a 100 non-agency positions have been lost and the proposal to close agencies had been made only in South Dakota, hearings in South Dakota had not yet been concluded and of course no action by the South Dakota commission had been taken, and that was the posture in which the Section 6 notice was served.

    Now incidentally I should have stated earlier that virtually all the facts that I’m reviewing are to be found in the Court of Appeal — in the District Court’s findings of facts and some inclusion of law which appear at page 351 and following of the printed record that is before you.

    Now, after the service of this notice, the railroad refused to bargain.

    It flatly refused to entertain the proposal.

    Lester P. Schoene:

    That is borne out by finding number four on page 352 of the record.

    The letter of December 24th there referred to appears on page 34 of the record and it will be noted that the reason for the refusal to bargain by simply the carrier regarded here is not a proper subject for bargaining and the use of patient of management prerogatives and it made no mention of any of the other reasons that were later adduced for its refusal to bargain.

    Subsequently, as finding number four also points out this same position was reiterated in discussions and in correspondence.

    On January the 27th, 1958, as finding number five points out, the union notified the Railroad that it would have to treat the railroad’s actions as a refusal to bargain under the Railway Labor Act and that it would proceed further in accordance with the provisions of the Railway Labor Act.

    In accordance with that announced position, the union on February the 5th, 1958 invoked the services of the National Mediation Board that is covered by finding number 6.

    Now, I would like to read specifically finding numbers 7, which says the on the date of February 24th, 1958, the National Mediation Board by its Executive Secretary addressed a letter to the Director of Personnel and the plaintiff, Mr. TM Van Battan and to the President of the Telegraphers G.E. Leighty advising that the application filed by the Telegraphers has been reviewed by the Board, advising further that the Board considered that apparently at proper Section 6 notice has been filed in this manner and accordingly, the Board have docketed the application as case number 25696 and that’s a typographical error that should be number A-5696 as would appear from the record at page 43.

    I call the attention specifically to the reaction of the Mediation Board because insofar as there is any room for administrative determination, as to what is a proper subject to be entertained under the Railway Labor Act, this is it.

    Now, there’s no specific finding that is bargainable, and that is subject of mandatory bargaining as Mr. Elson pointed out in the District Court in response to a question.

    But insofar as there is room for an administrative determination under the Railroad Labor Act, the Board after reviewing the application from Mediation wrote to party saying that apparently, a proper Section 6 notice had been served.

    Pursuant to the docketing of the case, mediation was actively progressed under the assignment of the mediator from May the 22nd to May the 26th, 1958.

    That is not included in the findings of fact but appears from the testimony undisputed appearing at page 154 of the record.

    Now at this point, I need again to diverge from the exact sequence of events shown in the progression of the case because Mr. Heineman testified, and it’s not disputed, that on May the 26th while the mediation was going on in Chicago, then his Director Personnel Mr. Van Batten was there representing the Railroad, and Vice President of the union was there representing the — representing the organization.

    On that date in Madison, Wisconsin, Mr. Heineman had a brief conversation in the car near the state office building with Mr. Leighty, the President of the Union and me.

    During this conversation, according to his testimony and we don’t deny it, he asked us whether we would care to discuss the central agency problem, and made no offer to discuss the Section 6 notice, but having recently procured authority of the South Dakota Commission of close 53 stations that enlargely assigned with others, he wanted to know whether we were — would like to talk about the central agency plan.

    We thought we were too far apart to talk about it.

    And I think the best evidence that this had nothing whatever to do with the — with the proposed contract change is to be found in the fact that although the mediation was going on that date in Chicago, neither Mr. Heineman nor Mr. Leighty reported the conversation to their representatives who were conducting or representing their respective organizations in the mediation conferences.

    It was something entirely apart.

    Now, the reason I mention that is that that incident has been used in this Court by the railroad to seek to create the impression that it was the union rather than the railroad that was refusing to bargain whereas the record is perfectly planned from the acknowledgment by the railroad of the very first letter that the union wrote namely on December the 24th, 1957 that the railroad positively and consistently refused to bargain.

    And it was admitted in the testimony by Mr. Heineman that he never had agreed to bargain upon this particular proposal.

    And it is also —

    I don’t understand you as far it was, you just preferred to what was the proposal that you turned down?

    Lester P. Schoene:

    Well, we didn’t turned down any proposal by —

    Or that you have said you could discuss?

    Lester P. Schoene:

    Well, what Mr. Heineman had said he was willing to discuss with us was the program when he had to outline of which by this time had developed or include several other States besides South Dakota, although proceedings in other States except South Dakota was still going forward.

    And he was willing to discuss the impact of that problem upon the employees represented by the union.

    And with that that — I mean, we went too far apart on that subject to enter into any negotiations upon it.

    Now, at page 2 of our reply brief, we have quoted, “Testimony of Mr. Heineman and which I cite he had mentioned that he had consistently refused to bargain upon the particular proposal that we make.”

    Charles E. Whittaker:

    There was just one proposal as I understand, am I right Mr. Schoene?

    Lester P. Schoene:

    That is correct.

    One —

    Charles E. Whittaker:

    You proposed the insertion of the covenant that no position in existence on December 3, 1957, it would be abolished or discontinued except by agreement between the carrier and the organization.

    Lester P. Schoene:

    That’s the proposal.

    Felix Frankfurter:

    Could I ask you this just to —

    Lester P. Schoene:

    Sure, sure Mr. Justice.

    Felix Frankfurter:

    Could such a – isn’t such an agreement depended upon what state commission is doing abolishing stations and so on?

    Lester P. Schoene:

    I think not.

    I would come to that in the course of the argument, but I don’t get that the Railway Labor Act can be subordinated to the actions of state commissions.

    I have —

    Felix Frankfurter:

    Then this must be a bargainable question under the Railway Labor Act?

    Lester P. Schoene:

    Yes, sir.

    And that’s a —

    Felix Frankfurter:

    In your view?

    Lester P. Schoene:

    That is in our view with this, that’s right.

    Felix Frankfurter:

    I’m thinking of the early case of New Heavens where we held that certainly the public service commission except that it is called I have forgotten what, can abolish (Inaudible) the Railway Labor Act that’s involved in the —

    Lester P. Schoene:

    Well, I think that makes a big difference.

    Felix Frankfurter:

    All right.

    Lester P. Schoene:

    Well, Mr. Heineman’s testimony was as it appears at page 104 of the record, you understood my testimony correctly that after the proposed rule of the order of railroad telegraphers served in December of 1957, I personally participated in making the decision that the telegraphers should be told then it is not a bargainable subject matter.

    I was then fully aware of that attitude of the carrier from its inception.

    That attitude on the party — on the particular rule has not been modified nor in my opinion, can it be.

    Mediation services of the National Mediation Board, as shown in finding number 8 on page 353 of the record terminated on May of the 27th, 1958.

    Arbitration was proffered as the Mediation Board has required to do as its last final act when in finds that it cannot resolve the controversy and both parties declined the arbitration.

    Accordingly, on July the 10th, 1958, as shown by finding number 10, the Union initiated a strike both among its membership and received almost unanimous authorization to call a strike over the failure and refusal of the railroad to bargain about this issue.

    Strike call and instructions were issued to the membership on August the 18th calling a strike for August the 21st and that’s covered by finding number 11.

    Now, on that same day, August the 18th, the National Mediation Board, although it had previously completely processed the case through the normal procedures have mediated it and it concluded that it could not resolve the issues and proffered arbitration as its last required act, again, entered the case on an emergency basis which it frequently does when a strike is eminent and adopted in this case, this new entry into the matter as its docket number E175.

    That appears in finding number 12 and it mediated the case from the — under that emergency intervention until August 20th, 1958, the day before that the date set for the strike.

    On August the 20th, it again withdrew and the strike was set to begin the following morning.

    I mention this emergency mediation particularly because it too, gives rise to an issue in the case.

    As I indicated in description of the District Court’s decision, the District Court denied any prominent injunction.

    He did however feel that the reentry into them abide the Mediation Board in to the case on the eve of the strike set a second 30-day waiting period into operation, and that therefore, the strike would have to be postponed until September the 19th and they issued that’s — an injunction accordingly until September the 19th, 1958 enjoining the strike until that date.

    Charles E. Whittaker:

    Would you tell me right exact place Mr. Schoene how did he ordered the action to dismiss and at the same time ordered an injunction to issue?

    Lester P. Schoene:

    What — what the Court did in its order which appears at page 259 is first to order the injunction of issue until midnight September 19, 1958.

    Following that is that it is further ordered that the prayer for injunctive relief extending beyond September the 19th, 1958 and —

    William J. Brennan, Jr.:

    1959?

    Lester P. Schoene:

    No that’s –-

    William J. Brennan, Jr.:

    Page 259 of the record?

    Lester P. Schoene:

    No, 359 I’m sorry.

    It is further ordered that the prayer for injunctive relief extending beyond September 19, 1958 and any other relief prayed for in the complaint is amended and it this hereby denied and except for the relief here in above given the complaint as amended is hereby dismissed.

    Now, on the same day Mediation Board terminated its emergency service —

    Felix Frankfurter:

    May I just put in a minute?

    Lester P. Schoene:

    Surely.

    Felix Frankfurter:

    This injunction in of December 19th because of his assumption that 30 days more could be (Inaudible) have a substantial order of that —

    Lester P. Schoene:

    That — that’s right.

    Felix Frankfurter:

    Was that contested before the District Court?

    Lester P. Schoene:

    Oh, yes.

    That — by that.

    Felix Frankfurter:

    I mean, it’s merely as to the — as to the discretionary power to issue it but as to the power to issue this?

    Lester P. Schoene:

    As to the —

    Felix Frankfurter:

    On the fraction of 30-day extension?

    Lester P. Schoene:

    A certain power as to the propriety, as to — and if an appeal was taken from that portion of the order as well as —

    Felix Frankfurter:

    I know that there is no second 30-day?

    Lester P. Schoene:

    That’s right.

    Charles E. Whittaker:

    I must admit this new order because I never have seen a notice like this?

    Lester P. Schoene:

    Well, I don’t think I have either, but, I — I don’t see that there’s anything basically improper about it except the 30-day restraint that — And also on the same day that the — that the Mediation Board terminated its services on August 20th.

    This — the complaint in this action was filed in the District Court and the motion for temporary restraining order also filed.

    The Court heard arguments on the motion for temporary restraining order throughout the day and throughout the afternoon of August 20th and at the close of the day, issued a temporary restraining order and continued the hearing for the next several days.

    At this point, another diverting factor enters in.

    The Railroad on August the 21st, the day after the litigation had began, the day after the temporary restraining order had been issued wrote a letter to the union saying your proposal of December 23rd is in violation of Article 6, of the National Mediation Agreement of November 1, 1956.

    Now Article 6 of the Mediation Agreement of November 1, 1956 set a term on certain kinds of proposals such as wages, overtime payments, changes and rights of pay, changes in health and welfare payments which would not be proposed for change until after November 1, 1959.

    Proposals relating the stabilization of employment were expressly accepted from Article 6 and as I say this was raised for the first time after the proposal had been before the railroad for well over nine months, after the strike had been called, after the litigation had been begun, and the temporary restraining order had been issued, the railroad also announced its proposal to submit to the National Railroad Adjustment Board the question of whether the proposal was in violation of Article 6 of the 1956 agreement.

    This was obviously an opportunistic and belated effort to invoke the authority of the Chicago River case.

    Lester P. Schoene:

    And the reason for this particular submission is very easy to trace because in the argument in the District Court, the day before, with respect to the temporary retraining order, the Railroad had argued that the real heart of this controversy is the union’s claims that the station agency program would give rise to claims under the existing agreement.

    And therefore, the Court should look behind this proposal to amend the contract and should enjoin the strike on the authority of the Chicago River case.

    We responded that even though — even if you assume that the railroad is right in its inferences, still it’s not with Chicago River case because as this Court’s decision a few weeks after the Chicago River case pointed out in Manion against the Kansas City Terminal Railway Company that the Chicago River case is predicated upon claims being pending before the National Railroad Adjustment Board and they had no claims pending before the National Railroad Adjustment Board with respect to violations of existing contracts.

    Not only that, they were not in a position to submit even belatedly and opportunistically any claims about violation of the existing contract because they had no such claims on the property.

    They had no controversy on the property about it.

    So in order to get around the Manion case —

    Felix Frankfurter:

    I don’t understand that Mr. Schoene.

    They had no claims on the property?

    Lester P. Schoene:

    That’s right.

    Felix Frankfurter:

    I don’t know what that means.

    Lester P. Schoene:

    The — the organization have made no claims that the Station Agency Program violated the existing agreement.

    There was — there was disagreement about that but — but no claims had been filed on the management for any violation existing —

    Felix Frankfurter:

    To clear up another thing, first is the outstanding agreement which they sought to — of which they gave the notice — to which you gave the notice that you wanted an amendment.

    A minute ago, few minutes ago you spoke of the Mediation Agreement of 1956, what was that?

    Lester P. Schoene:

    The Mediation Agreement of 1956 contains amendments to existing agreements of some 15 organizations on a national basis with the railroads represented by Carriers Conference Committees.

    Those amendments related to rates of pay —

    Felix Frankfurter:

    Including Chicago North Western?

    Lester P. Schoene:

    Including Chicago North Western and that dealt primarily with rates of pay and revisions in the health and wealth program.

    Charles E. Whittaker:

    Would that then just a part of the — of the bargaining agreement between departments?

    Lester P. Schoene:

    Yes.

    That occurs frequently in the railroad industry Mr. Justice Whittaker.

    It’s the only industry that I know of where it happens with such frequency.

    Our basic agreements continue from year to year and are amended from time to time and sometimes by joint agreements which in this case should have 15 unions and about a 150 railroads.

    Felix Frankfurter:

    They continue automatically?

    Lester P. Schoene:

    They continue automatically until somebody serves the notice to change it under the Railway Labor Act which requires a 30-day notice.

    So, quite obviously because the railroad was not in the position to put before the Adjustment Board any claims under the existing collective bargaining agreement, it felt nevertheless, that by asserting on each part, a violation by the union of the National Mediation Agreement that it could generate a controversy that it could then submit to the Adjustment Board and come in and say, “now we have a dispute pending.”

    Are they —

    Potter Stewart:

    Your — your point is that their tactic was to convert this into a so-called “minor disputes?”

    Lester P. Schoene:

    That actually the exactly, Mr. Justice.

    William J. Brennan, Jr.:

    But to do so, solely for the purposes of this jurisdiction conjunctive relief, is that it?

    Lester P. Schoene:

    That — that’s right, that’s right.

    And the — on — on that point incidentally, the District Court found as a matter of fact that no dispute giving rise to this part was a minor dispute and found specifically that’s been the dispute that did give rise to the attempted strike was the proposal from contract amendment.

    Felix Frankfurter:

    Mr. Schoene, would you take care of curiosity of mine if you stay —

    Lester P. Schoene:

    If I can.

    Felix Frankfurter:

    By referring to finding that it becomes now that discussing the significance whether there is a controversy as to whether the findings are challenged in the Court of Appeals and they are challenged here?

    Lester P. Schoene:

    There is no challenge to any on the findings with the exception of the last sentence of finding number 17.

    That — that finding is a —

    Felix Frankfurter:

    Could that (Voice overlap) substantially identical to the rule?

    Lester P. Schoene:

    That’s right and the challenge there as I understand it is that the evidence on which that particular sentence was based on those copies of two agreements which are identical in substance to the proposal here involved except that they are for a term instead of they, as in this proposal indefinite with subject to revision at any time.

    Felix Frankfurter:

    I mean, was that challenged before the Court of Appeals?

    Lester P. Schoene:

    I believe it was although —

    Felix Frankfurter:

    (Voice overlap) —

    Lester P. Schoene:

    I beg your pardon.

    Felix Frankfurter:

    Could they have relevance to the constitution?

    Lester P. Schoene:

    I don’t think so.

    Felix Frankfurter:

    All right.

    So —

    Lester P. Schoene:

    I — I don’t think so, but with that one exception, the brief here says that they are challenging none other findings.

    Felix Frankfurter:

    All right.

    Lester P. Schoene:

    Now, the hearings before the District Court continued with some interruptions until September the 5th, 1958 and under extensions of the temporary restraining order, that appears from the documentaries on the first page of the record.

    On September the 5th, the District Court rendered its opinion which as I have already indicated, denied injunctive relief beyond September the 19th but granted injunctive relief until that date.

    That was on Friday and so, by mutual agreement, the entry of the final decree and findings in order was postponed until Monday, September the 8th so as to give both sides an opportunity to draft proposed findings and decree.

    Now, in addition to the findings that I have already referred to under my discussion of the facts, I would like to make a number of other significant findings, beginning with the finding number 17 on page 356 of the record.

    The Court found number 17, the proposed contract change incorporated on the Section 6 notice served by the defendant to (Inaudible) on December 23rd, 1957 relates to the length or term of employment as well as stabilization of employment.

    Collective bargaining as to the length of term of employment is common place.

    There are a variety of collective bargaining provisions in the railroad industry relating to stabilization of employment as such including provisions for severance allowance, supplementary unemployment compensation benefits and guaranteed employment.

    The latter provision in one instance goes back more than 30 years and then the challenged finding of the contract provision substantially identical to the rule proposed here — proposed by the defendant to (Inaudible) are in existence on at least two railroads and as I understand, the challenge goes to the substantial identity rather than for the existence on the agreements.

    Was that finding overruled by the Court of Appeals?

    Lester P. Schoene:

    No.

    No, the Court of Appeals did not disturb any of the findings of the District Court.

    (Inaudible) if I remember –-

    Lester P. Schoene:

    18 in the contract changed proposed by defendant (Inaudible) in the Section 6 notice of December 23, 1957 relates to rates of pay rules and working conditions and these are bargaining relations under the Railway Labor Act.

    19, the dispute giving rise to the proposed strike goes out on the failure of the parties to reach agreement on the proposed contract change incorporated on the Section 6 notice served by defendant (Inaudible) by the plaintiff on December 23rd, 1957.

    20, the plaintiff has refused to negotiate, infer, mediate or otherwise treat with defendant (Inaudible) on the proposed change and agreement set forth in the Section 6 notice served by defendant to (Inaudible) on plaintiff on December 23rd, 1957.

    The plaintiff did show willingness to negotiate upon the Central Agency Plan including a possibility concerning severance pay.

    That last sentence grows out of the conversation with Mr. Heineman in Madison, Wisconsin on May the 26th.

    21, the dispute giving rise to the proposed strike is a major dispute and not a minor agreement under the Railway Labor Act.

    There is no issue involved there and is properly referable to the National Railroad Adjustment Board.

    From the various findings, the Court concluded as a matter of law, first that the complaint as amended fails to state a claim upon which relief can be granted except for the issuance of an injunction expiring at midnight, September 19, 1958 to the defendant to (Inaudible) serving and progressing in Section 6 notice of December 3rd — 23rd 1957 has conformed to all the procedures and requirements of the Railway Labor Act.

    Three, no issue no involved in the proposed strike which plaintiff seeks to enjoin is properly referable to the National Railroad Adjustment Board.

    Four, the proposal contained in Section 6 notice served on December 23, 1957 by the defendant to (Inaudible) upon the plaintiff presents an issue which is a proper subject of negotiation and is bargainable under the provisions of the Railway Labor Act.

    Five, the proffer of services on an emergency basis by the National Mediation Board and its acceptance by the plaintiff and the defendant to (Inaudible) initiated the new 30-day cooling off period under the Railway Labor Act running from the termination of such services on August 20, 1958.

    Sixth, the Court is without jurisdiction to grant injunctive relief except for an injunction expiring at midnight, September 19, 1958.

    And —

    Potter Stewart:

    You — you understand that the — any part of the Court’s conclusion to the law were based on the Norris-LaGuardia Act?

    Lester P. Schoene:

    Yes, indeed.

    I think it is — it is clear that from the argument before the Court which on our part was devoted almost entirely to the Norris-LaGuardia Act by the conclusion number six.

    Potter Stewart:

    There’s no reference at all, direct sanction is there?

    Lester P. Schoene:

    I beg your pardon?

    Potter Stewart:

    Is there any reference in these findings and conclusions to the statute?

    Lester P. Schoene:

    There is in the opinion, Mr. Justice Stewart.

    The opinion of the Court appears at page 165 and following and I think — and I think it’s there indicated that the — the finding number six is predicated on the Norris-LaGuardia Act.

    It is also apparent from the issues before the Court particularly the issues raised by our answer that the Norris-LaGuardia Act was invoked and is the basis for our conclusion number six that the Court is without jurisdiction to grant injunctive relief except for an injunction expiring at midnight, September the 19th, 1958.

    Charles E. Whittaker:

    That raises the old question that I had a while ago.

    I don’t understand how the Court is without jurisdiction, it can be subject to some exemption for truth and then maybe it doesn’t make any difference here, don’t waste time about it but I just want to withstand it.

    Lester P. Schoene:

    Well I — I can — I can understand your difficulty and as a matter of fact, this morning I struck out of my notes an argument predicated upon that.

    And the union appealed from a temporary restraining order on the basis by the Norris-LaGuardia Act and from the continuances of the temporary restraining order and from the injunction to September the 19th.

    The railroad on the other hand appealed from the denial of permanent relief and the dismissal of the complaint.

    Then on September the 16th, 1958 having filed the appeal, the railroad appeared before the District Court and sought an injunction pending appeal pursuant to Rule 62 (c) of the Federal Rules of Civil Procedure.

    The Court, although very much troubled about its jurisdiction to grant such an injunction under the Norris-LaGuardia Act, having just held eight days before that it was without further jurisdiction in the matter, nevertheless granted an injunction pending appeal.

    Lester P. Schoene:

    The difficulty that the Court had with respect to this inconsistency between its having held that it had no jurisdiction beyond September the 19th is set forth in the record at page 369.

    The Court said it was very much troubled about whether he has jurisdiction.

    He doesn’t want to exceed his jurisdiction.

    He recognizes the inconsistency between holding that he has no jurisdiction and still exercising jurisdiction purportedly under Rule 62 (c) in clear contravention of the Norris-LaGuardia Act.

    Nevertheless, the injunction was issued and the union then amended its notice of appeal to include appeal from the injunction pending appeal.

    Is that issue before us the 62 (c) issue?

    Lester P. Schoene:

    I beg your pardon?

    Is that 62 (c) issue before us?

    Lester P. Schoene:

    Yes, it is.

    Where is that?

    I would suppose that was all merged (Inaudible) injunction.

    Lester P. Schoene:

    No.

    Both the injunction until September the19th and the injunction pending appeal are not moot because in both cases, bond was posted in the amount of in the amount of $50,000.

    And if those injunctions were wrongfully issued we’re entitled in these very procedures and in the Norris-LaGuardia Act to recover under the bond.

    And the issue as to both injunctions was preserved on appeal and although not specifically considered by the Court of Appeals was necessarily disposed of by its holding that a permanent injunction should have issued.

    Charles E. Whittaker:

    Well I didn’t understand Mr. Justice Harlan to ask you to moot but that whether they were merged in the merits — in the (Inaudible)

    Lester P. Schoene:

    Yes, I — you are right.

    I thought Mr. Justice Harlan’s first question was, is the issue —

    What you are saying is if they are — they are now appears so that we can reach them if we want to.

    Lester P. Schoene:

    That’s — now, that — that completes the resume of the facts up to the decision of the Court of Appeals which I have already outlined.

    I — my time is running short.

    I want to reserve a little time for rebuttal so I’m going to have to be rather rapid in my discussion of the legal issues.

    Hugo L. Black:

    Would mind repeating or could rebound it and state it now very briefly what you consider the legal issues that we have to decide?

    Lester P. Schoene:

    Yes.

    I think the — the legal issues are before you are in the first place whether this proposal presents a bargainable issue under the Railway Labor Act.

    If it does, then I think some of the other tendered issues disappear because in that case, I’d take it there would be no doubt that the Norris-LaGuardia Act is applicable and the jurisdiction of the District Court limited by the terms of that Act.

    Even it is our position that even if no proposals for compulsory bargainability under the Railway Labor Act is presented, it nevertheless does not follow that there’s anything illegal about making the proposal or anything illegal about striking on the count of the carrier’s refusal to bargain about it nor any reason to hold the Norris-LaGuardia Act inapplicable to the resulting labor dispute.

    Hugo L. Black:

    In other words, if they could have decided that you had the right to bargain on that —

    Lester P. Schoene:

    But then I see no — I — I think then the issue as to Norris-LaGuardia disappears because Norris-LaGuardia clearly is applicable, the contention that it is not —

    Hugo L. Black:

    But suppose it decided the other way, what’s left is —

    Lester P. Schoene:

    Well, that then, it is still our contention that there’s nothing illegal about the strike even if the railroad didn’t have to bargain with the —

    Hugo L. Black:

    Do you mean — do you mean if it’s permitted?

    Lester P. Schoene:

    That it’s permitted and that there is no basis for holding the Norris-LaGuardia Act inapplicable even in that situation.

    Hugo L. Black:

    Well I don’t see the difference between those two, I don’t quite understand it.

    It seems to me you’re saying that if you’re authorized to bargain on those points by the Act and that the Court was wrong in saying so — even in wrong in saying so that the Norris-LaGuardia Act should not have been ignored.

    Lester P. Schoene:

    I think the difference is simply this.

    The — it’s a question of whether the railroad is under a legal obligation to bargain with us on the one hand —

    Hugo L. Black:

    But it is — it is if it is permitted, isn’t it?

    Lester P. Schoene:

    I don’t think so.

    Hugo L. Black:

    You don’t think so?

    Lester P. Schoene:

    Well, wait a minute —

    Mandatory bargaining exactly.

    Lester P. Schoene:

    And I — my basic position is exactly what you have just stated, Mr. Justice Black, namely that the entire area of interest between employers and employees is subject to bargaining and subject to mandatory bargaining.

    If however —

    Felix Frankfurter:

    Do you mean anything that may forgetting the law, anything that seems rationally related to the industrial relations, to the employer and employees on railroad is the fit subject to be tendered by the union?

    Lester P. Schoene:

    Well, that is right.

    Felix Frankfurter:

    And — and required to be responded through the Railway Labor Act, is that it?

    Lester P. Schoene:

    That’s exactly it.

    William J. Brennan, Jr.:

    And that Norris-LaGuardia?

    Lester P. Schoene:

    Well Norris-LaGuardia, I say, is applicable –-

    Felix Frankfurter:

    That follows –-

    Lester P. Schoene:

    That follows — Norris-LaGuardia is applicable —

    William J. Brennan, Jr.:

    That’s not another issue here although it’d be —

    Lester P. Schoene:

    Yes.

    William J. Brennan, Jr.:

    It was related this way.

    Whether — whether the dispute which brought you before the Adjustment Board.

    Lester P. Schoene:

    That — that is correct that there is another issue which is imposed and which the respondent says is an independent ground for sustaining the decision below is this related submission to the Adjustment Board.

    And —

    Felix Frankfurter:

    Mr. Schoene, in the interest of time, I wonder if you can help all of us, if you state it again without arguing, leaving your time, what the materials are on which the first issue that you’ve stated to be resolved by this Court?

    And what am I look in decisions of this Court in practice before those various branches under the Railway Labor Act, et cetera, et cetera?

    Lester P. Schoene:

    Yes.

    I’ll be glad to indicate that.

    You look first to the Railway Labor Act itself and you will find that Section 2 first of the Railway Labor Act, that’s 152 in Title 45 of the U.S. Code says it shall be the duty of all carriers —

    Felix Frankfurter:

    Would you mind reading it to me again?

    Lester P. Schoene:

    It’s Title 45 —

    Felix Frankfurter:

    Yes, I know that.

    Lester P. Schoene:

    152 first.

    Felix Frankfurter:

    All right, thank you.

    Lester P. Schoene:

    It should be the duty of all carriers, their officers, agents, and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, and thus, it has limited to making agreements concerning rates of pay rules, and working conditions, but to settle all disputes whether arising out of the application of such agreements or otherwise in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.

    Felix Frankfurter:

    I don’t want to argue it but —

    Lester P. Schoene:

    Secondly —

    Felix Frankfurter:

    But may I ask whether in the breathe of your statement, would I be entitled to infer if the trainmen today, 1960 think that their interest requires protection from membership on the Board of Directors, you would regard that as something that you have the right to present?

    Lester P. Schoene:

    No, I would not.

    And I think that would be called contrary to the specific prohibition that neither side shall interfere with the choice by the other of its representatives under the Act.

    And I think just as if a railroad felt that it required representation in the union which would violate the counterpart of that prohibition similarly, the brotherhood would have no right to bargain for representation on the — on the Board of Directors directly.

    Felix Frankfurter:

    Well, but it isn’t as broad as I have phrased it namely, anything which to thinking person not versed in law would be a relevant consideration to industrial relation at all.

    Lester P. Schoene:

    Well, I — I suppose it is subject to those specific limitations contained in the Act. But I wouldn’t recognize any others.

    Now secondly, you have 27 years of construction by the parties of what this scope of bargaining is.

    We have included in the appendix to our brief a survey what has been the subject matter of bargaining under this Act, a great variety of it particularly bargaining without question until 1953 by the parties over all sorts of subject matter especially stable as action of employment.

    And —

    Potter Stewart:

    Of course there’s — what your opponents call the lengthy excursion beyond the courtroom.

    In other words, that’s not in the record, free of the dusty baggage of cross-examination, authentication, and similar inconveniences entrusted upon the judicial process.

    Lester P. Schoene:

    Yes, that’s what I call the ultimate version that they’ve cast on it (Voice Overlap) —

    Potter Stewart:

    That isn’t true but that was not — that’s not in the record.

    Lester P. Schoene:

    That’s entirely true, that is not in the record, this is a matter of public information that shall — that contemporaneous construction of the law by the parties.

    Felix Frankfurter:

    Not judicial knowledge but judicial notice.

    Lester P. Schoene:

    That’s right and beginning at page 57 of that brief, we have also assembled what has happened since 1953 when this issue of the limited conception of bargainability was first raised with respect to our health and welfare proposals.

    You will note from that tabulation that with respect to over 50 proposals since 1953, the railroads have raised this issue of non-bargainability.

    It has become a regular tactic of bargaining puts all that issue into the picture.

    So that the railroad — the union is put in the position where it must take what the railroad wants or face litigation upon that issue.

    Lester P. Schoene:

    I will reserve the balance of my time for rebuttal.

    Earl Warren:

    Mr. McGowan.

    Carl McGowan:

    Mr. Chief Justice and may it please the Court.

    I will address myself first to the question of jurisdiction of the Federal District Court because the Court expressed interest in it.

    Mr. Schoene concluded by saying that he would prefer to admit that he was not clear on whether there was jurisdiction and whether there wasn’t.

    I think I can make that clear if not to him at least to this Court.

    The reference was made to the fact that the T P&W case, in the TP&W case, this Court left the question of jurisdiction unresolved in that situation which was one of where the injunction is found upon the back of their acts of violence committed by the brotherhood.

    And I think Mr. Justice Stewart in the New York Central case, when he was still on Circuit, dissented from a finding of federal jurisdiction in that case because he felt that the reasoning in the — in the — judgment in dissent in the TP&W case was persuasive.

    My comment on that is that I think the TP&W case has turn analogous to the case of the man who stands along the right of way and shoots the gun on interstate train.

    And whether or not, there is federal jurisdiction in that situation, I think it is a real question.

    I would respectfully call your attention, Justice Stewart, to the — to a case decided earlier in Sixth Circuit, the Grand International Brotherhood of Locomotive Engineers, 226 F.2d, in which a white employee sought an injunction against a contract which the — his union and the railroad that was proposed — supposed to enter into.

    There was no diversity there, there was no diversity in our case that the District Court in that case dismissed the complaint because of lack of jurisdiction.

    The Sixth Circuit reversed noting that what was really asserted there was a right of action accruing under the Railway Labor Act to be free of the kind of contract which the railroad and the brotherhood proposed to negotiate and that whether or not that right could be established at trial of the case.

    There was jurisdiction to hear and decide on the merits on that claim.

    William O. Douglas:

    What was the citation to that case?

    Carl McGowan:

    That sir is 226 F.2d, 604, certiorari denied, 350 U.S. 967 and I suggest to, if I may, to Justice Stewart that his participation in that opinion seems to me to be more relevant to the question of jurisdiction here than the doubts he expressed in New York Central case when he was addressing himself to the rationale.

    It was worked out by judgment in the Seventh Circuit followed by your colleagues in New York Central case.

    I myself in the New York Central case would not have depended, I believe, on the sheer interference with the carriers’ obligation under the Interstate Commerce Act to base jurisdiction.

    Because I think in the New York Central case, what the carrier really was claiming was a right under the Railway Labor Act to be free of a strike under the circumstances where the union had moved to take no action under the Railway Labor Act by way of a new contract, demand, or anything else to lay illegal basis for a strike under the Railway Labor Act.

    I think if the jurisdictional question of the trades in those terms, it would resemble the (Inaudible) case more than the TP&W case.

    Charles E. Whittaker:

    Mr. McGowan may I ask you sir, as I understand, your jurisdiction here was based upon 1331 and 1337.

    Carl McGowan:

    Yes, sir.

    Charles E. Whittaker:

    Now, the right then to fall within those sections must be one “arising under” not involving the Constitution or laws, is that not true?

    Carl McGowan:

    That is right, sir.

    Charles E. Whittaker:

    Now then here, does your action do more than involve the Constitution or laws?

    Does it arise under the Constitution or laws of United States?

    Carl McGowan:

    Well, I believe it does, sir.

    I think I can make that clear if I state what our precise contention is.

    And I won’t unless I denote this moratorium issue and the (Inaudible) issue because that’s unrelated aspect.

    It was not central to our main contention.

    Carl McGowan:

    We say that if this contract demand was proper under all the circumstances and by that I mean within the contemplation of Congress under all the circumstances as a proper demand upon the railroad, why of course it’s in the basis of a legal strike.

    And there could have been no injunction ground to us, Norris-LaGuardia Act or not.

    Conversely, we say that if this demand was not within the congressional contemplation of the Railway Labor Act, it cannot be made the basis of illegal strike at the end of the exhaustion of the Railway Labor Act procedures.

    And therefore, under the Railway Labor Act, construed in the light of — of all the congressional policies reflected to other statutes and respect to transportation, we have a right to be free of that strike.

    Now, that right in my judgment arises on the Railway Labor Act.

    Its existence turns upon whether you construe the Railway Labor Act the way we say it should be construed or whether you do not construe the way we should do it.

    We say it should be —

    Hugo L. Black:

    What you’re saying isn’t it that if the cases decided if the Act is construed one way, the case will have to be decided one way.

    If the Act is construe the other way, the case has to be decided in another way?

    Carl McGowan:

    If construe in other way, Mr. Justice Black, we win, if construed other way, we loose and as I understand it, that has been a familiar test of federal jurisdiction in these cases.

    Now, I won’t cite the language of that effect because I’m sure it’s unnecessary.

    Now, the ORT attached very premise upon which our contention rests, namely that they say there can be no such thing as an improper demand under Section 6 of the Railway Labor Act.

    Mr. Schoene has now repeated somewhat from that because he recognized that case of one hypothetical that obviously one of the demands that could not be made the right — the basis for legal strike.

    And of course, they don’t really mean what they say, when they say that no demand can be treated as improper under the Railway Labor Act because it must be remembered the Railway Labor Act is of two-way street.

    The carriers can serve demands too and they can lock out the employees at the end of the exhaustion of the Railway Labor Act procedures if their demand was a proper one.

    Suppose that we would decide that we couldn’t live with this kind of obstructionism with respect to modernization and that we serve a contract demand on the ORT that you cannot intervene in legal proceedings for the state commissions, for the Interstate Commerce Commission in which we’re seeking authority to modernize our operations without the consent of the railroad.

    You think they would bargain about that, of course, not.

    They wouldn’t have to and we couldn’t impound upon that a legal lockout at the end of the exhaustion of the procedures under the Railway Labor Act.

    So it is obvious that they do not wish — really wish to press the contention all the way that there are no limitations upon the kind of demands that can be met under Railway Labor Act.

    The second more important reason why that attack on our premise is unsound is because this Court has held in the racial discrimination cases that there are demands which cannot be proper under Railway Labor Act and which cannot be made the basis of a legal strike on the Railway Labor Act and which can be enjoined without reference to Norris-LaGuardia.

    And to the extent that they have tried to make it appear in their brief that all those cases deal with the situation where the brotherhood was bargaining for something which was contrary to the interest of a minority of the group, that brotherhood represented, I say, what about Howard?

    Howard was the last case in that series.

    Howard involved bargaining for the members of the class which the brotherhood represented because there, the Negro minority had their own union.

    They were represented by the — the brotherhood that came forward in that case with the demand that a class of jobs called porters be abolished.

    I presume that the brotherhood in that case was stabilizing their employment.

    They were asking for all the jobs and an another group failed and it didn’t affect their members at all, so that that, that particular rejection of that demand is a proper demand under Railway Labor Act, didn’t turn at all upon construction of the Railway Labor Act with respect to the duty owed by the union to the members of the class represented.

    It was rejected because — in the words of Howard Larvey which I think puts our whole case very well.

    It was because of the repugnance of the union objectives in making demands to a federal policy implied judicial construction of the Railway Labor Act.

    We say that when you look at the — this demand, and the setting in which it was made with reference to its purpose and effect, and what was really aimed at, that there is an obvious repugnance between the union objectives lying behind that demand and a federal policy to be implied from a judicial construction of the Railway Labor Act.

    Felix Frankfurter:

    Mr. McGowan, how much would one have to travel outside the findings of the District Court to validate your last sentence?

    Carl McGowan:

    Sir, I’d like to deal with those findings for a moment.

    It is true as I’ve said in my brief that I challenge only one true finding of fact as distinct from the conclusions of law which were put under that heading.

    And that was the last sentence of the finding number 17, and I agree that it’s not a very important point, but if you will look at some of the last findings that Mr. Schoene read to you, number 18 for example, the contract change proposed by the defendant Telegraphers in Section 6 notice, December 23, relates to rates of payrolls and work conditions with the bargaining under National Railway Labor Act, that’s our case.

    That’s the conclusion of law on the facts of this case and Judge Perry indeed said that he didn’t distinguish too sharply between findings of fact and conclusions of law and this one is specific and I’m going to object to —

    Felix Frankfurter:

    Except by labelling them as such.

    Carl McGowan:

    I beg your pardon?

    Felix Frankfurter:

    Except by labelling them as such.

    Carl McGowan:

    Except by labelling.

    That is right.

    But in — when I challenged this particular finding, he said, this again could very well be in the conclusions of law as far as that is concerned and the other findings that they in —

    Hugo L. Black:

    May I ask you this, if it doesn’t bother you?

    Carl McGowan:

    Yes, sir.

    Hugo L. Black:

    The Court of Appeals reversed precisely on that point, didn’t it?

    That this language didn’t permit —

    Carl McGowan:

    Yes —

    Hugo L. Black:

    — bargaining on the proposal they made.

    Carl McGowan:

    Well, Mr. Schoene said that the Court of Appeals didn’t disturb the findings that like and less that the Court of Appeals virtually wiped out the findings in this case and found that the — that the demand was aimed at an objective which I will describe in a moment and that it was not — that Section 6 notice did not relate to rates of payrolls and working conditions but again, if it is treated as a finding of fact they reversed it, I say this is the conclusion of law.

    But there’s nothing in these findings, there are nothing in these findings with which we cannot live and still establish in this Court the propriety of relief we got from the Court of Appeals.

    Hugo L. Black:

    I didn’t mean to indicate that they reversed it to these findings of facts.

    I meant that they held that the statute, under that statutory language, this proposal could not be made.

    Carl McGowan:

    That is right, sir.

    Hugo L. Black:

    I don’t know to what extent that depends on the fact.

    Charles E. Whittaker:

    But the whole — it couldn’t be made — if the whole couldn’t be made or only that it was on exclusive management prerogative over which (Inaudible) bargained.

    Now, which is (Inaudible)?

    Carl McGowan:

    Sir, let me hasten to say that I don’t think this Court is held very far to our decision by analyzing this problem in terms of management prerogative.

    I think I can agree with my brother counsel in that effect.

    He won’t agree with me when I also said I don’t think this Court is going to be held very far towards our decision by analyzing this problem in terms of the right to strike or the literal provisions of religion to the Norris-LaGuardia Act or most importantly, the allegedly limitless scope of collective bargaining in an unregulated industry.

    That brings me to the — to the — what the facts are and then what this command is really all about and what this lawsuit is really all about.

    We have set forth in our brief a number — based on the testimony whatever I know is about the condition of railroad industry and that is that without modernization, it is in real trouble that if the North Western Railroad presents an aggravated condition of that I can tell you.

    The testimony shows that when the new management took control on April 1, 1956, there had been $8 million loss in the first quarter.

    Carl McGowan:

    The payrolls were in danger.

    Our wage revenue ratio was the highest of any railroad in the country which is to say that ratio of wages paid to revenues and the North Western is slipping right down that slide towards this Court where it was less than 20 years ago.

    One of the — the new management did a number of things.

    They dieselized fully, they spent what few funds they had on a new car shop in Iowa which centralized repair operations.

    One of the things they found that was most in need of action was the fact that Northwestern was built to the grainger country and it is a grain-carrying railroad very heavily, and it was laid out from the last century where about every five to 10 miles where there’s an elevator and a lumber yard, there was a station with a one-man agent there.

    With the passage of time, the building of hard roads right alongside of this railroad, business, now like business language, trains disappeared, and the agents found themselves without anything to do.

    We conceives a project of trying to keep down the expense of those branch lines and these are the mostly rural branch lines by trying to reduce the cost of the agent’s expense and with the hard road and the telephone, we thought it was perfectly feasible to have one agent go up the road five miles and do whatever is needed up there and down the road five miles and do whatever is needed there.

    So, we devised the Central Agency Plans.

    We filed our petition under the state statute.

    We filed in South Dakota, November 5, 1957.

    Hearings were held throughout the State.

    November 26 to January 17, the Telegraphers appeared in those hearings, protested, gave evidence, filed briefs, participated in oral argument and did everything they could.

    It’s perfect to proper of the litigant to try to convince the Commission that it was not in the company’s interest, for the convenience necessity for that plan we put in effect.

    They did the same thing in Iowa.

    They did the same thing in Minnesota.

    They did the same thing in Wisconsin.

    In all four of which States, we received eventually orders from the State Commission ordering us or directing us, authorizing us to put into effect with the one exception of South Dakota where South Dakota said, “We think this is so important that we direct you to put it into effect under the terms of the quite separate statute giving us power over the regulation of service and the requirement of service of a railroad.

    Now —

    Could these State Commissions have directed you to curtail your agency — your stations if you had not wished to do so?

    Carl McGowan:

    South Dakota said that it only could but that’s what it did.

    We filed them —

    Under an application?

    Carl McGowan:

    We filed under a separate section of the statute which said that whenever we — even if it’s close or consolidated a station or remove the agent, we should get permission of the state authority.

    They said that well, you’re not really changing the service here because the agents here were serving both places, the customers are going to get the service that therefore, we don’t even think this statute is perhaps adequate, but just to make it clear, we’re going to ship over on another statute on which we could have gone out and ordered you too rearrange station service, either of increasing it or lowering it and therefore you are directed to — to put this order in effect forthwith.

    Now in the three other states, they simply issued orders approving and authorizing us to put the matter in effect (Inaudible) with.

    Felix Frankfurter:

    Now the dates of these state orders are relevant to the dates of this litigation?

    Carl McGowan:

    Very well, Your Honor, (Inaudible).

    We filed in South Dakota November 5.

    We announced at that time that this was — we want to reassure South Dakota in order to single him out for discrimination.

    So we made a public announcement and put it into petition that we were not doing this in South Dakota.

    Carl McGowan:

    This was going to be a systemwide program.

    So that Telegraphers knew on November 5 that we were going to initiate far reaching reorganization of a station agency program.

    It was less than six weeks later that we were served with this Section 6 demand.

    Now, I think the chronology is — is very significant and I like to thank Mr. Schoene of being the good lawyer that he is, but he had also read the New York Central case of Justice Stewart, where the brotherhood simply walking out in protest against the closing of the yard, had nothing under the Railway Labor Act on which to found a — to found a legal strike.

    He knew as long as knew that we were starting a long hard battle with the Telegraphers that a lot of other people for that matter over the Central Agency Plan, these hearings were going to drag on for the States for months and months and that’s just the way it work out.

    By putting that demand and when they did, and assuming the exhaustion of the Railway Labor Act Procedures withstanding order about the time they got — we got our first order if we got one, they would have the muscle of the strike weapon and that’s exactly the way it worked out.

    Now, why do I say that — why do I say that — that this demand was aimed at the Central Agency Plan?

    I’m not just drawing inferences myself, I take it right out of their own words and that is to be found in the — in the record in the strike ballot.

    July 10, 1958 confirmed all of our suspicions about what this is all about.

    William J. Brennan, Jr.:

    What page is that?

    Carl McGowan:

    It’s on page 53 of the record am I am going to take the liberty of reading it to some degree because I think this is critical.

    Hugo L. Black:

    Is there any dispute between you on that point?

    Carl McGowan:

    Sir, there certainly is.

    Hugo L. Black:

    I was asking.

    I don’t know.

    Carl McGowan:

    There is.

    Indeed, when they presented findings in the District Court, there was no mention of the Central Agency Plan in those findings.

    You can read the findings as they repost are annoying of Central Agency Plan and the only reference now is the one we got in because Judge Perry was willing to add a sentence the fact that we didn’t try to bargain about the Central Agency Plan.

    But that — this is the circular in which they insert the distributor strike ballot and ask for authority, they ask that the worker — the members to vote on the strike ballot.

    Page 53, since Mr. Ben Heineman’s described, security control has gotten on North Western Railway System, and we have all witnessed a revolution in the management of this railroad.

    All types of service on which the railroad has now a monopoly had been drastically curtailed with corresponding inhuman slashes in employment (Inaudible).

    The loss of business resulting in the curtailed service in turn leads to further reductions enforced and further reduction of services (Inaudible).

    Well, last fall, a program of this sort that is a violent concern to our members that initiated by this management.

    This program has directed the elimination of vast majority of agents serving one-man stations.

    Proceedings are begun of where the public service command of South Dakota, Minnesota, Iowa and Wisconsin seeking authority either to close nearly all of one-man stations or to have one agent serve two, three, or four stations.

    Similar proceedings in other States maybe expected momentarily.

    In the public interest as well as the interest of our members and the organization as a whole, we have done everything possible to resist this program to reliance on the provisions of our agreements and by that he means the existing agreement and they made the claim that South Dakota that we couldn’t this on existing agreement.

    Through informing the residents, the effect in (Inaudible) is the consequences of the Railway’s actions and to attendance that all the hearings of the various commissions with presentation of the evidence and argument, we have tried to make reasoned common sense, and humanity prevail.

    Since last November, practically, all the time as your general chairman and four vice presidents as well as much of the time of a number of our local chairman and our general counsel, and our president had been devoted to these efforts.

    And now, listen to this, however, it became evident that on early date, that they meet this on this law effectively would require strengthening of our agreements.

    Carl McGowan:

    What does that mean?

    That means we have got to get something new into our agreements if we’re going to be able to deal with this situation effectively.

    Hugo L. Black:

    Do you think that affects a legal problem?

    Carl McGowan:

    I do, sir.

    Hugo L. Black:

    To that motive?

    Carl McGowan:

    I do because our argument is that — that in deciding what is the scope and content of rates of pay rules and work conditions under Railway Labor Act, we’re entitled to have that — that should be construed in the light of congressional policies and purposes with respect to transportation.

    And if we can demonstrate to you as I think we can that there is a federal interest in avoidance of waste and in good efficient regulation, both at the State and federal levels are both regulated in interstate commerce after all.

    But then construed in the light of that policy, and with reference to its purposes and effect in this particular setting of facts, we do not believe that Congress could have intended or did intend that we should be put to the test of a legal strike in order to try to modernize the railroad and that’s our case.

    William O. Douglas:

    Is there any provision in this Act for a second or third or fourth go around in the mediation in the 30-day period, mediation (Inaudible)?

    Carl McGowan:

    In the act itself, Mr. Justice Douglas, there are no limitations on the number of times the Mediation Board could come in and mediate.

    There is the first mediation referred to as a part of the process and then the usual practices whether there’d be a second mediation.

    Would that happen in this case, the only controversy that in this case is over whether or not the — the second mediation start a new 30-day period (Inaudible).

    The District Judge held that it did and gave us an injunction on the merits on September 18.

    That is disputed by the other side and I — I –.

    William O. Douglas:

    What is your conception of the Act with this 30-day cooling of period, the recurring thing when the end of the 30-day arrives as new mediation effort and (Voice Overlap) —

    Carl McGowan:

    Well neither the — excuse me sir, neither —

    William O. Douglas:

    — no result and then another 30 days?

    Carl McGowan:

    Neither side has to accept the emergency mediation so that each party has in its power after the first mediation not to participate in another emergency mediation because that’s a proper service and both sides have to accept.

    Our contention is that if they both accepted, if they both accepted, and there was another emergency mediation.

    I knew that the — we think that the Act lies in the congressional purpose is to try to give and make the mediation effective would call for a new 30-day period and that was the point on which Mr. Justice —

    William O. Douglas:

    What — what — is there any terminal point on that for either party?

    Carl McGowan:

    The terminal point is that neither party has to accept the proper services by the Mediation Board.

    William O. Douglas:

    And then the — the — well, isn’t that what has happened here?

    Carl McGowan:

    Well, the — the district judge decided it since both parties here accepted the emergency offer of mediation, the railroad — the union could not strike until 30 days after that mediation had finished.

    That was — that was the injunction we got on the merits of September 19 in the District Court.

    William O. Douglas:

    As a practical matter, what — what happens after the end of that 30-day period?

    Carl McGowan:

    I suppose that the Mediation Board can offer a — well I presume there’s a legal right to strike or lockout as the case maybe.

    I presume the Mediation Board could offer a new emergency mediation, but neither party would have to accept it.

    Felix Frankfurter:

    If there is no — if mediate — if emergency intervention by the Mediation Board is not accepted just as the right to strike, is there any — any more left under the Railway Labor Act to accommodate, I am using it purposely useful word or non technical word short to accommodate the claim on one side of this, on the other short of economic tussle.

    Carl McGowan:

    The Mediation Board can certify the dispute to the White House and the President may call an emergency board and that consumes another 60 days before that could be a legal right to strike approved.

    Hugo L. Black:

    May I ask you that you don’t have time this afternoon, I would like to get your idea what you think are the criteria to control the decision as whether these things are within the definition of rule of working (Inaudible) and so forth.

    Do we have to look at the statistics and practices or what?

    Carl McGowan:

    I think I can answer that quickly.

    I think — I think that this demand in the first place, let me say this demand goes far beyond anything that they have demonstrated either in the record or outside the record in terms of a complete veto power over the discontinuance of positions, not — not limiting layoffs where the man is affected and when he — if he dies or resigns, his job disappears.

    This — this demand is a veto power over the discontinuance of positions.

    And that is why we think at all that we are on sound ground and we say it also underlines the purpose here of the brotherhood was to get control over the modernization plan known as the Central Agency Plan because by freezing the position as distinct from the men in the jobs, they could ward off this threat to the number — total number of jobs for their members.

    And we think that’s the basic distinction, but when we talk about stabilization of employment.

    I know of no true stabilization employment scheme which is concerned with having men do work that is not there to be done.

    Their concern was trying to balance the work over the year so that the maximum numbers of men are allowed to participate, but if they all assume work to be done.

    Hugo L. Black:

    Well, have they always done that?

    I suppose some of the (Inaudible) vary from time to time.

    Carl McGowan:

    One of the reasons — one of the reasons, sir that they haven’t been able to do it in the Railway experience, at least in the experience of one railroad has stated the section then.

    They’re the ones that are always feel the grant of the impact of downturn conditions because the railroad doesn’t want to spend what money it has to keep the section — to keep the railway in good shape.

    No, because they — they never let go off the job, they have no permanent jobs and they get six months a year sometimes if they’re lucky.

    The reason is because the dollars that could be used to employ them more are being paid.

    In this case, we say the station agents who are not really engaged in productive labor and for whom there is not enough work to be done.

    Earl Warren:

    We’ll recess now.