"t',laita of the C',enoral Conmnitlee of The Order of 17ailroad Telegraphers on Katt~ar; Ci:y Southern lirtihru) that tile c·slabit,hcd m;ruutl commission rr.tc of 3"t, with tt maxitnutn ill $70.00 per car, on carlo:.d express shipme-ais pald the railmad slatiou agca(s by the hailtvay Exprvciv Agency. Inca, trl,;ch ra·'r ~,,, artitrarily reuacc·d to a maximum of $5.00 per cur as of 7.lay 4, 1!1:1:5, vvith the approval of the raiio·ay cotupany bit( without notice to or conference cr agrcen:eut with the r<pvosentative committee of tmpioyces, :,hall be :as·o:rd hurl all agents adversely affected thereby ce rc·~ra~naitely tcknlnm·t(1 i<r: the monetary loss sustained through the arbhrary reduction."
FINDINGS.-Thc'lhird DirMcu of the Adjustincut Board, upon the whole reened and all the evidence, find that:
The carrier unit the employees involved in Iltis dispute are respectively carrier and empluvows within (its tnemiia_q of the llaihvay Labor Act, as approved Julie 21. 1934.
This Divishat of ihc Aujustment Boatd hits jurisdiction over the dispute hnolvevd herein.
'I'll(, larties to said dispute were given tine ut·tice of hearing thereon.Ali agreement bearing date of September 1, 1027, is in effect between the parties.
POSITION OF PETITIONER.- -Pelitlunens .subu;'·.t iltat the 3r/o commission, with a oaximtun cf k10 per car on all carload express shipments, was considered by tile p'trtied in arriving at ill acceptable rate of pay. They contend that the express cotmni!~si,'tt lutes ~,annot le;,ally he vhanged without notice and conference, and ihal tile act of the carrier in ugrccittg with the express agency to reddtloe Ilte rates withou'. such notice and conference, constitutes a violatlou of the agreenurot. They refer paurtioularly in this connection to the termination clause tvhich makes the ;tgrventeat effective as of September 1, 13;57, unit continues it in eM·, t until terminated by thirty days' written advance notice by eittiar pal t>.
The petitioner nlaiflJa111q that the employees involved in this case, although nominally- enpdoyees of the Itnilway Express Agency, Inca, are, as concerns railway express business, actually the employees of the carrier, that couunl"tmts paid for express business are part of their basic compensation. They maintain further that the carrier either took the initiative ill reducing cmnntissions or concurred with the express agency in so <loin_.
POSITION OF TIIE CARRIER.-Tho carrier makes tile following contentions:
"2. That the carrier bas no contractual obligation to :maintain atrtouuts or ttttes of eoutnissions paid by tile Railway Express Ag·ncy to the carrier's eurployces;
OPINION OW THE REb`ERCP7.-It is not necessary to review the contents of the extensive record in which the correspondence betwccn trio lcarties and their positions is dcvelop,d at length. Strong n'gut=tents which carry a high degree of pwnslo:sivoncsa tire adv:nrt-od on both sides, but technical legal ar-u_ fiiritns do Lot go to tile root of this issue.
The praciice by which railway agents are paid commissions for services perforinedd for unnpanics other than their principal employer, the particular rathoad coinpan>, is smdficieinly general to ba reg,ar"b·d as g:trt aitd parse; of the systent under which industrial relations on American Railway's are conducted.
The recipient of commissions mther such a nyFtcin is in an entirely different =tutus, both as regards his pricuary employer, the railway coinpany, and as regards Ills secondary employer, in this case the Railway Ilxpress Agency, Inc., l ion a person who has occasional or fortuitous opportnuity to ii_crease his regular wages by suppbrmeutary earnings.
A triangle in human relationships involves difficulties and Usually gives rise to considerable argument. Cases now before the National Railroad Adjustment Board indicate that this life is no exception to the rule. It will probably be better in the long run for all three of the parties concerned with the question of express commission on any given railway to have their respective rights and responsibilities chtrifiod, than it will to lie continually involved in needless disputes. It must be remembered that cotnnds,4ons figure in negotiating agreements as well as in biterpredug them, and it is easy to picture representatives of employees ininitnizing their importance ,tad nwgiiifying their preeuiousness while a given railway is magnifying their significance as a dependable source of income.
In the instant case, the railway company anti the Railway Express Agency, Inc., jointly have undertaken to revise commissions in a manner which <·oitstitiites lit essence denial oil the part of both the railway and the Express Agency of contractual obligation to the agents concerned, for the maintenance of the rate of commissions which obtained before the revisions were made. Both the Railway Company and the Railway Express Agency, Ire., ::re covered by the Amended Railway Labor .let. li', therefore, the established rate of commission .should be interpreted as a contractual obligation any change in the rate would have to be trade in conformity with the provisions of Section 6 of the Act.
Assouiing a contractual obligation, and assuming. as In the instant case. ex parte action without proceeding under Section 6 of the Amended R;iilway Labor Act, the question then arises as to whether in seeking redress the Raihvay or life Express Agency, or both of there together, should be hailed into Court.
Lt deciding this case then, two questions must be answered: First, did the established rate of commissions constitute a contractual obligation subject to the provisions of Section 6 of the Amended Railway Labor Act? Second, if payineut of the established rote of connnission was a contractual obligation, was it the responsibility of the Railway Company or of the Express Agency, or were they jointly and severally responsible?
As to the first question, there is ample precedent to establish tile ohlig;aion either to continue paying commissions when such commissions were in force at the the time wage schedules were adopted, or to adjust wage schedules when pafmciut of commissions ceases. However, in response to citation of cases which have enforced this obligation, argument is advanced that no such obligation exists when merely the amount of commissions is altered. In support of this position, it is argued that express commissions vary widely from month to month, season to season, and from year to year and that such variations greatly affect the total compensation of tile railway employees involved. In further support of this view, it is pointed out that the "wage fabric" of these employees is stdtjeet to change, and when such changes occur either one of the parties
desiring the change in wage rates must serve notice of this desire and tall for conference.
The Reieree is of the opinion that normal fluctuations ill oomlllbsions, (Ill( to factor's other than the willful acts of either the railway or the Express Agonc-, nuoq stand in quite a <iiffcrcnt light trout flit -tuations ocon·iotte<I by :t definite change in the l:a His upon wbieh express commissions ;are 11guli!t11, would appear to be a highly rechtth al argument that abolition of couuni>siotls which is the equivalent of n r,·;lai4:,m of 101) percent woald re<puire· a reyision of the wage rates; chorea s,, a re<hccti<:_l of llillety percent, scvnllty-five ltercellt, fifty percent, or any other matotial amount would not require each revision.
'Fla, Iteferce finds that under the ngrccentent in which Estjress comnlossiousTlv· r<·ct_d of the instant ease indicates flint both the railway ennqlmy aril the E~pres s Agency participated In the ebange in the rate of conlnd=sion widelt gave zut,e to this complaint. This fact make, it pertinent to consider the second que:;tion propounded above, as to the respective obli,·ations of (it,, I;.aitway G~anpany and the hallway Express Aareney, Inc.
The lwforec is of tie opinion th;tt the relatiolts1tilt between express coruntissiotls oil the oar. h Ind aw<l the rr·.tos wh?ch agents are paid by- the railways oil the other goes colttidcrab'-y- deeper than tnerely confirming an obligation either to itnlintain la1Roa of wa~:;·s and co,tnnisspnN intricl or to lank,, atljtl,stments in flte way log;tllla<.scrilwd.
As long as a railway colnlor.ny or the t;aihvuv Express Agency, Ili(., is fit :t position to shift rcsponsbillii,w tm,·k and forth, 1ho Purposes of the Amended ltailwa> Labor Act in lr-lxei to this three-corn<red robt;ionship are brand to be impeded. Those purposes, ns stated ill Section Two (2), tire as follows:
"SitdTteN 2. The purposes of tile Act are: (1) to avoid ally interruption to commerce <>r to the ol,onuion of tiny ctlrrier engaged therein; (_') to forbid ally hlnlration upon freedom oi' association among eulplo>'Oos or 'any dental, as a ccondfiom of eonploylncltt or otherwise, of the right (of cutployces to join it labor onganizati<tn; (3) to provide for the complete indepentlence of carriers aid of employers in tit, matter of self-organization to carry out fit(! purposes of this Act; (4) to ll,vvlde for the prompt and orderly settlement of all disputes eoncorn;ng rates of pat', rules, a: tvorking conditions; (6) to provide for tile prompt and orderly settlentont of all disputes growing (,Ili of grievances or out of the intelpretatioll ur aplfiication of agreenuerlis covering rates of pal', rules, or working conditions:'
ht the same section, ill(, purposes of tile Act are further amplified in the first paragraph under "General Duties." This paragraph reads its follows:
"It shall be the duty of all oarriers, their officers, agents, and employees to exert every reasnrtahle effort to slake and ntaint:lin agreements concerning rates of pay, rules, and tvorking conditions, anti 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 grooving out of any dispute between tile carrier and tile employees thereof."
The raihvavs of the country still tile Railway Express Agetlcy, Inc., are both covered by this law. There can be no doubt that Congress intended that employer-employee relationships involving express business, as well as relathanships involving railway business direct, should be amicably. efficiently, kind promptly adjusted under tile provisions of the law.
Argument has been advanced in this ease to the effect that ill respect to express business, agents are not the employees of the railway ill a way to make the railway contractually liable for their commissions. Ill another case now before this Division, argument involving elaborate definition of the abstract legal requirements, requisite to establish the employer employee relationship, was advanced to establish in law, the fact that agents are in no sense employees of the Railway Express Agency, Inc. The Referee has also carefully noted
the rulings cited in that case (TE 247) which as :t nvtter of leiml definition seem to uphold that rlew
Courts are frequently called upon to resolve legal hupasses of this kind and tile high Authority of the Supreme Court. or the Ullitcll States may be fllvokeci for applying the rule of reason to them. Taking a reamonable and realistic view of Lile three-cornered relationships between agents, tile railway oil which they work and the Railway Express Agency, tile., the Referee cannot fail to be impre·sed with tile close eoiweetion between the Railways of the Untied Stuto; unit tile Rkhlva" Express Agency, tile. Although tlo Express -Agency is a scparace corporation, it is owned And controllccl by the carriers over whose line, express bu,.iness is carried. There tire a number of specific farts which need not be cited fit detail to shoo, flow the rclation~hips bctweell the (;11,11019 and tile R,rilway Express Agency are iatvrrvoven. Ambiguity roncermaq Cite status of elliployees who serve bout the railways all(! the= Railway Express Agency, Inc.. and who,,( total compem,dion is made up o~ regular wages, hourly, daily. or monthly, tls the e:me 1lniy be, paid l1,: tlm rnilwny rout of coltnni"Ions paid by tile Railway Express Agency, u111at inevitably nmke for confusion and disccod inslea'l of tile prompt :til·1 erdelly sccttleiunt of disputes wliicll it is the purpose of the Aniemloo no ihv;ty Lalmr Act to lal.nlole.
For the purposes of this Act, it appear:: clear tluit agents are primarily eml>1~7rs o: tile pnrticlllnr railway cal which they work, anal. se^olriarily. ernployves of tile btailw~y Expae%is .igeney. lip., who^t 'h0- spl'\'e. Legal deflnltlonS aside, they serve yeal' 111 alts )eat nlll ;is agelhs (if tile Express Agency, And it fs net vital to the i,sues involved whether they are called employees, fullclionalfes. agent,, or what not.
Tho salient fact is that express: commissions are inextricably interwoven with the wages which the Railway contracts to pay agents. It must. therefore, be hold especially ill view of the clone pu'opcrty rclatioir.hips between the rnilw:iys and till, Railway Expresss Agency. Inc., that the Railway by which an went is primarily employed and the Raihvny Express Agency, Inc., by which he is secondarily employed, are jointly and severally obligated to mainlaill the w:1Ce structure of agreements, lnsolfar its express commissions are found to lie an essential factor ill determining the wages to be pai·.1 by tile railway. In the juclement of the Referee, this rating would be sound even though tile railways alnl the Railway Express Agency, Inc- leer( not fit these eoporato relationships as closely interwoven as they arc. With them so interwoven, such a realistic approach becomes inescapable.
The most effective vvay in which 11ic railways and the Railway Express Agency, Inc., can discharge the duties imposed by agreements and by the Amended Railway Labor Act is to meet squarely the general question how matter, involving express commissions supplemental to wages paid for service to the railway- shall be handled. 'that is tile responsible way to proceed and in the judcment of the Referee it will prove in the long run more satisfactory for all concerned, than to be confronted by the inevitable disputes sure to result from shifting responsibility back and forth.
Althoush as above noted, tile Referee is aware that the Railway Express Agency, Inc., disclaims tile status of employer to agents, working for the Agency oil commission, and although he is not advised of the existence of any formal agreement between the Railway Express Agency and the Agents employed by the Carrier involved ill the instant case, lie still holds that within the purview of the Amended Railway Labor Act agents are secondarily employees of tile Railway l,,xpress Agency, Inc. As to the existence of Agreements, the Referee holds that the force of established practice, taken together with the fact that the rate of commissions on express business is a vital factor in determining the rate structure in respeet to service performed for tile railwily, makes the responsibility to pay commissions fit the rate contemplated when the wage rates oil the railway were agreed to tantamount, in the purview of the Aineanled Railway Labor Act, to a triangular agreement between the three Parties involved and subject to termination only in conformity with the provisions of the Act.
In holding that the railway concerned ails the Railway Express Agency, Ire., are jointly and severally liable under agreements in which express commissions constitute a factor in the wage structure of agents, the Referee is aware that the question remains open whether to make the Railway or the Railway Express Agency, or the two together, respondents in cases involving
express commissions. The answer to that question would naturally depend upon the language of the particular agreement and the circumstances surrounding the case. In the instant case, the railway and the Railway Express Agency, Inc., were participants in tile change in cononssionu of which complaint is made. The Referee is of the opinion that petitioners would have been within their rights under the agreement and the Amended Railway Labor Act to have hailed them .jointly before the Board. The- were equally within their rights in malting the Railway the respondent. In either case, the claim would stand or fall on its merits.
(a) 'Elie carrier respondent in this case shall either cause the Railway Express Agency, Inc., to restore the rate of commissions as of the date when the rate was changed or compensate the claimants for the monetary loss sustained because of the change of rate.
(U) if the carrier and the Railway Express Agency, Inc., elect to leave the changed rate of commission in force, the carrier shall continue to make good the loss to claimants occasioned by the change in the rate of commissions, pending notice and negotiation, in conformity with Section 6 of the Amended Railway Labor Act.
By Order of Third Division: