It had always maintained that considerations of employment could not be controlling in cases involving such actions as abandonment, and acquisition of trackage rights; from 1935 until its interpretation of the Interstate Commerce Act was reversed by the Supreme Court in 1942, the Commission held to the opinion that it had no legal authority to impose protective conditions under section 1 of the act. Representatives of labor unions frequentfy appeared at this type of proceedings (abandonment) during the depression. In conformance with its established doctrine that adverse results for particular parties at interest could not and should not be the controlling factors in abandonment proceedings, nevertheless, the Commission gave no greater consideration to the effects upon labor than it did to the effects. upon commercial interests located on the line. The decision of January 1934, on the proposed abandonment of a small branch line in. Texas, reveals the Commission's view: Objection to the proposed abandonment was expressed by a representative of the transportation employees of Texas, on the grounds that it would curtail employment and destroy the value of the properties of the applicant's employees. These matters cannot control the disposition of a case of this character.80 81 The Chicago Great Western Trackage case was the first proceeding under section 1 of the act in which employee representatives claimed that the Commission had power to include in its approval provisions which would protect employees.8 It was proposed that the Great Western use a freight house of the Kansas City Southern Railway in Kansas City, Mo., and discontinue the use of its own. Ten employees were to be dismissed, 16 were to suffer pay cuts, and 8 were to be relocated. The labor interveners claimed that the action in question was a consolidation and that the Commission, in accordance with its reasoning in the St. Paul Bridge & Terminal Railway case, should impose protective conditions. The conditions which they suggested were similar to those required for employees affected by coordinations under the Emergency Act.82 The Commission agreed with the carrier that the proposed change did not constitute a consolidation and that "public convenience and necessity" was a much narrower concept than the general public interest. It quoted the Supreme Court in Texas and Pacific Ry. v. U. S., 289 U. S. 627, as follows: The Interstate Commerce Act was passed for the protection of those who pay or bear the rates. The standards it establishes are transportation standards, not criteria of general welfare. The Commission said that the suggested protective conditions had nothing to do with the public convenience and necessity but were aimed merely at the maintenance of a private benefit.83 80 San Antonio, Uralde, Gulf Railroad Company Abandonment, 199 I. C. C. 83, 87 (1934). 81 Chicago Great Western Railroad Company Trackage, 207 I. C. C. 315 (1935). 82 The employees suggested that the Commission require: (1) "That no employee who was in the service of said applicant immediately prior to said 1st day of August 1933 shall be in a worse position than he was in immediately prior to said 1st day of August 1933 with respect to his compensation and/or employment" as a result of this measure; (2) that any moving expenses and property or other losses suffered by employees as a result of this measure should be made good to them. The same, p. 320. 83 The position of the Commission was as follows: "We have not had occasion to review the report and order of division 4 in the St. Paul control case and do not undertake to do so in the present proceeding. However, that was a proceeding * * * under section 5 (4) in which the applicant sought an order authorizing it to acquire control, by lease, of the railroads and other properties of the St. Paul Bridge & Terminal Railway Co. and of the St. Paul Union Stockyards Co. The present proceeding differs from that one in that it is brought under the provisions of section 1 (18-20). Our power to impose conditions is stated in different terms in the two sections. Whatever may be the extent of our right to attach conditions in section 5 (4) proceedings we are of the view that under section 1 (18-20) the terms and conditions we may attach must be such as in our judgment public convenience and necessity require. We may not properly borrow from section 5 (4) and read into section 1 (20) the power to impose such terms and conditions as we may find to be just and reasonable." It was pointed out that, although the Congress had enacted many amendments to the Interstate Commerce Act in 1933, it had not seen fit to include a labor provision similar to that in the coordinator section of the Emergency Act. The analogy with the St. Paul Bridge & Terminal Railway case was explicitly rejected, for reasons which already have been stated.84 In subsequent abandonment proceedings the Commission reiterated. its doctrine that effects on employment could not be controlling 85 Despite Commission's consistent denial of its statutory authority to impose protective conditions under section 1, labor organizations continued to demand that such protection be granted. After the Supreme Court had upheld the Commission's authority under section 5 (4), the labor representatives insisted that this decision also applied to section 1. But the Commission stood its ground. From late in 1940 to the middle of 1942 labor representatives appeared at the hearings on a great many abandonment applications to oppose approval on any available grounds and to bring out in testimony the adverse effects on employees.8 In July 1941 the Commission held that where an abandonment is an integral part of a proceeding coming under the jurisdiction of section 5 the displaced employees are entitled to protection.88 In this case certain lines affiliated with the Missouri Pacific system proposed to simplify and consolidate their terminal operations at New Orleans. This involved abandonment of ferry operations and construction of connecting tracks. Since the Transportation Act of 1940 had been passed by the time the decision was rendered, the Commission imposed conditions which conformed to the mandate of the Harrington amendment.89 84 Same, p. 49. 85 See, for example, Atchison, Topeka & Santa Fe Railway Company Abandonment, 212 I. C. C. 423 (1936); and Chicago, Milwaukee, St. Paul & Pacific Railroad Company Trustees Abandonment, 240. I. C. C. 183 (1940). 86 See, for example, Delaware River Ferry Company of New Jersey Abandonment of Operation, 212 I. C. C. 580 (1936); Colorado & Southern Railway Company Abandonment, 217 I. C. C. 366 (1936); Chicago, Rock Island & Pacific Railway Company Trustees Abandonment, 230 I. C. C. 341 (1938); Copper River & Northwestern Railway Company Abandonment, 233 I. C. C. 109 (1939); during the conferences preceding the renewal of the Washington agreement in 1941, labor representatives attempted to broaden the agreement's coverage to include abandonments, but were unsuccessful. The Railroad Telegrapher, March 1941, p. 166. 87 See, as examples, Texas Electric Railway Company Abandonment, 242 I. C. C. 765 (1940); White and Black River Valley Railroad Company et al. Abandonment, 244 I. C. C. 51 (1941); Denver & Rio Grande Western Railroad Company Trustees Abandonment, 244 I. C. C. 60 (1941); and Yazoo & Mississippi Valley Railroad Company Abandonment, 244 I. C. C. 163 (1941). 88 Texas & Pacific Railway Company et al. Operation et cetera. 247 I. C. C. 285. 89 The Commission said: "Although the application for permission to abandon the ferry operations and for authority to construct connecting tracks must be, and is, filed under section 1 (18) of the act, such abandonment and construction are component parts of the modified plan of operation. Inasmuch as the proposed dismissal of employees in this case arises out of an inseparable plan of operation, which in part can be made effective only upon an authorization under section 5 (2) of the act, we must comply with the provisions of paragraph (2) (f) of that section. Nothing herein is to be construed as an expression of view that we have authority under section 1 (18) to impose conditions for the protection of employees." The protective conditions were as follows: For a period of 4 years or the service period of the employee, whichever should be shorter, no employee retained in service should be placed in a worse position with respect to working conditions and compensation-including, if necessary a monthly displacement allowance to make up the difference between his present and former rates of compensation. Any employee dismissed as a result of the transaction was to be paid a monthly allowance equal to his full average monthly compensation during the year preceding his dismissal, subject to the following limitations: "The dismissal allowance of any dismissed employee who is otherwise employed shall be reduced to the extent that his combined monthly earnings in such other employment and his dismissal allowance exceed the amount upon which his dismissal allowance is based "The dismissal allowance shall cease prior to the expiration of the protective period in the event of the failure of the employee without good cause to return to service after being notified by the applicant of a position, the duties of which he is qualified to perform and for which he is eligible or in the event of his resignation, death, retirement on pension, or dismissal for good cause." It was also provided that no employee should lose during the protective period any benefits, such as free transportation, pensions, hospitalization, and relief to which he had theretofore been entitled. An arbitration committee was provided to settle disputes over the application of these provisions. The same, pp. 293–297. The same principle and the same conditions were applied in January 1942 in the decision on Chicago, Milwaukee, St. Paul & Pacific Railroad Company Trustees et al. Construction, et cetera.90 The decision of the Supreme Court in the Pacific Electric Railway 7 91 case reversed the Commission's stand with respect to its power to impose protective conditions under section 1. During the progress of this case, representatives of railroad labor appeared in many other abandonment proceedings and asked the Commission to retain jurisdiction in regard to the protection of labor pending the Supreme Court's decision. This the Commission did, except where the abandonment of an entire line was involved. In justification of this latter position, the Commission relied on the doctrine set forth by the Supreme Court in Brooke-Scanlon Company v. Louisiana Railroad Commission (251 U. S. 396) to the effect that a carrier cannot lawfully be compelled to continue in operation at a loss. The Commission maintained that it was a "necessary corollary" to this doctrine "that a carrier cannot be compelled to remain in business merely for the purpose of furnishing employment." 92 Although the Pacific Electric Railway had applied for permission to abandon certain branches in connection with a general overhauling of its passenger service for purposes of economy and better service, section 5 was not involved in the proceedings.93 The Commission, therefore, denied jurisdiction in the matter of employee protection. The labor protestants, however, showed that a large number of employees were threatened with dismissal; according to their calculations, which were based on information supplied by the carrier, out of a total potential saving of $378,229 approximately 80 percent would be accounted for by wage-cost reductions. The Supreme Court overruled the Commission, for reasons which have already been stated 94 in the preceding paragraph. By interpretation of the Supreme Court the authority of the Commission extends to the imposition of conditions to protect labor even in economy measures undertaken by a single carrier. In the reasoning of the Court, if in regard to a proposal under section 5 the power to impose "just and reasonable conditions" in order to "promote the public interest" includes the power to impose conditions protective of labor, then it seems that this latter power should be implied also from the Commission's right to impose "such terms and conditions which the public convenience and necessity may require" in regard to a proposal under section 1. The Commission's distinction, however, seems to have had considerable weight of favorable opinion: The protests of labor had usually been in connection with proposals for consolidation or coordination involving joint action by two or more carriers. The more strenuous objections of the railroads to the Wheeler-Crosser bill, as has been indicated, were to that measure's application to economies undertaken by one carrier. Managements feared that Commission approval and labor protection would be 90 252 I. C. C. 49 (1942). 91 See, for example, Sacramento Northern Railway Abandonment of Operation, 247, I. C. C. 157 (1941); Denver & Rio Grande Western Railroad Company Trustees Abandonment, 247 I. C. C. 381 (1941); Louisville & Nashville Railroad Company Abandonment, et cetera, 249 I. C. C. 535 (1941); and Harriman & Northeastern Railroad Company Abandonment, et cetera, 249 I. C. C. 518 (1941). 92 Susquehanna & New York Railroad Company Abandonment, 252 I. C. C. 81 (1942). 93 Pacific Electric Railway Company Abandonment, 242 I. C. C. 9 (1940). 94 Since this decision, labor representatives have asked the Commission to impose protective conditions in two cases in which the Commission had previously reserved jurisdiction because the testimony did not contain sufficient evidence concerning the effects on employees. Erie Railroad Company Ferry Abandonment, 252 I. C. C. 659 (1942), and Seaboard et al. & Florida Railway Receivers et al. Abandonment, report of Division 4 on F. D. 13721 (7 mimeographed pages), November 16, 1942. required in connection with even minor reductions of "the facilities of a carrier for performing public service, or * * * the amount of public service previously being performed by the carrier." The Commission has never interpreted its power over abandonments, however, to include jurisdiction over such minor measures as the discontinuation of a train. or The Coordinator's bill had included economy measures undertaken by one carrier which might involve "unification, consolidation, merging of existing separate facilities which are operated by such carrier independently of one another in separate localities, and the transfer of work, operations, or services of one such facility to another" and any resulting abandonments of facilities, operations, or services. It was his opinion that, if jurisdiction were limited to unification of facilities and resulting abandonments, the protection of labor in operating improvements instituted by a single carrier would be made practicable.95 As a matter of principle, however, there seems to be no reason why a distinction should be made between labor-saving improvements made by one and those made by two or more carriers, unless it be held that legislative protection can be justified only where the Government is in some way responsible for the displacement of labor and that the consolidation of railroads has been an aim of public policy to a greater extent than have economy measures in general. SUMMARY COMPARISON OF PROTECTIVE PLANS A point-by-point comparison of the various plans that have been suggested will clarify the major similarities and differences to better advantage than was possible in the preceding section where it seemed more necessary to preserve historical continuity. Table 2 juxtaposes the corresponding provisions of the six major plans. TABLE 2.-Comparison of railroad-consolidation employment-protection provisions Act, bill, or agreement British Railway Act of 1921.... Wheeler-Crosser bill of 1936. Washington agreement of 1936. (a) Scope of application Consolidations undertaken pursuant to the general consolidation mandate. Coordinations undertaken under the authority and through the machinery of the act. Any measure undertaken by or affecting 2 or more carriers for purposes of economy, efficiency, or improvement in service, traffic, or revenues; or action by 1 carrier for any purpose involving consolidation of facilities and transfer of operations from 1 facility to another; or the abandonment of any existing facilities, operations, or services of such carrier or carriers resulting from any such action. Consolidations of facilities by 1 or more carriers; pooling or consolidatlon of operations; or any action which may reduce interrailroad competition or competition of railroads with other agencies or reduce the facilities of a carrier for performing public service or the amount of public service performed. Action by 2 or more carriers to consolidate facilities or operations or services previously performed by them through separate facilities. Consolidations of 2 or more carriers; 1 or more carriers' purchase, lease, or contract to operate the properties or any part thereof by another; acquisition of trackage rights, joint ownership, or joint use of another carrier's lines or terminals. 95 Two reasons were given by the Coordinator for his definition of the scope of his measure: "Two questions arise, one of law and the other of practicability. There are those who believe that any provision for dismissal compensation or similar protection to labor which is imposed by Congress must, as a matter of law, be dependent in some way upon the exercise of governmental authority in compelling or promoting or permitting the labor-saving improvement. Protection was, as above shown, so confined in the Emergency Act. The question of practicability arises in connection with the great variety of possible laborsaving devices or improvements, many of them of minor consequence, and often adopted for other reasons as well as possible saving of labor. Each of such cases would raise a dispute as to whether it did or did not save labor and, if so, to what extent. As a matter of practical adminstration, a hopelessly confused situ. ation would be presented" (report of the Federal Coordinator, 1931, p. 85). TABLE 2.-Comparison of railroad-consolidation employment-protection provisions— Act, bill, or agreement British Railway Act of 1921. Coordinator's bill of 1935.. Washington agreement of 1936. Act, bill, or agreement Continued (b) General mandate to guide regulatory policy Certain criteria were specified in the mandate to the Interstate Commerce Commission for its guidance in determining whether or not a measure is in the public interest: All the facilities which can be reasonably and efficiently utilized should remain available for public service; (2) adequate interrailroad and interagency competition should be maintained; and (3) existing opportunities for and security of employment should be retained; and when it becomes necessary to promote efficiency or economy by reducing the number of employees, move work locations, or cause working conditions to be less favorable, the workers affected should be placed in comparable employment and their livelihood provided for in the interim-or permanently in the case of employees of advanced age. The Interstate Commerce Commission was directed, in passing on measures as described in section (a) of this table, to consider the interests of the employees affected. (c) Method of administration British Railway Act of 1921. Consolidating companies merely ordered by law to protect employees as directed; no official machinery except in case of disputes, which are to be referred to a standing arbitrator or board of arbitration appointed by the Lord Chancellor. Emergency Transportation Act Through the coordinator and the regional coordinating committees, who of 1933. notify regional labor committees whenever a coordination which affects labor is proposed. Coordinator's bill of 1935.. Wheeler-Crosser bill of 1936 Through the proposed permanent coordinator of transportation; employees and management to refer disputes as to number of, occupational distribution of, and rules to determine the identity of those employees to be displaced to arbitration as provided in the Railway Labor Act; National Mediation Board authorized to appoint examiner to prescribe rules for determining moving expenses and property losses if no agreement is reached by management and labor. Through the Interstate Commerce Commission, with the aid of special adjustment boards composed of representatives of management, labor, and the Commission. Washington agreement of 1936. Companies required to give notice to employees and hold conferences with them to determine basis of selecting employees to be displaced; disputes to be settled through machinery of Railway Labor Act, except disputes over valuation of property, which are to be referred to competent real estate appraisers-one to be selected by the carrier, one by labor, and a third by these two, or, failing agreement, by the Chairman of the Interstate Commerce Commission. Transportation Act of 1940... Act, bill, or agreement British Railway Act of 1921. Coordinator's bill of 1935. Wheeler-Crosser bill of 1936.......... Through the Interstate Commerce Commission. (d) Notification of and discussion with employees concerning a proposed change Employees and management to agree on number and occupational distribution of workers to be displaced-full details to be included in the plan submitted by the carrier to the proposed permanent coordinator— and on rules governing the selection of specific employees to be displaced from combined employment register of consolidated company, if the action in question is a consolidation. Disputes on these matters to be subject to arbitration as provided under the Railway Labor Act. Employees subsequently displaced are to be considered as displaced by the action in question and are not to exceed the original specified number. Special precaution against management's attempting to escape or delay payment of dismissal compensation through extended or intermittent furlough, are provided. Plans submitted by carriers to the Interstate Commerce Commission to include specification of number and occupational distribution of employees to be displaced. Washington agreement of 1936. Notice to employees to include specified number and occupational dis Transportation Act of 1940_. tribution of affected employees; employee-management conference to decide on a basis for selecting the specific employees to be dismissed, relocated, etc.; no employee who is deprived of his employment after 3 years from the effective date of coordination is to be regarded as deprived of employn.ent resulting from the instant coordination, and no relocation expenses are to be compensated if not incurred within 3 years after the coordination. |