"Claim of the General Col l.lnittee of The Order of Railroad Telegraphers on Seaboard Air Line Railway that:
"(3) That all transfer allowances established by Article 3 of the Express Agreement of August 1, 1917, and higher rates in effect which have been arbitrarily changed, or changed by individual agreement, as at hioncure, N. C., shall be restored retroactively to the date such changes were made in violation of the Express Agreement, and all agents affected be paid the difference due them under the Express Agreement."
FINDINGS.-The Third Division of the Adjustment Board, upon the whole record and all the evidence, finds that:
The carrier and the employees involved in this dispute are respectively carrier and employee within the meaning of the Railway Labor Act as approved June 21, 1934.
The case comes before this division of the Adjustment Board exclusively on the question of the Board's jurisdiction.
The parties to said dispute were given due notice of hearing thereon.As result of a deadlock Willard E. Hotchkiss was appointed as Referee to sit with the Board as a member thereof.
On request, there has been a rehearing of the case with the Referee sitting as a member of the division.
A long and carefully prepared record is before the Board, extensive briefs have been filed and the case has been ably argued.
BACKGROUND OF DISYUTIC.-Effective July 1, 1909, a signed agreement was oxecrrted between the Southern Express Company and the Southern Express Agents, who are jointly employed as railway and express agents on the Seaboard Air Line Railway, governing rules, rates of commission, and transfer allowance for agents in tire employ of the Seaboard Air Line Railway, required by the Railway to also serve the Express Company as agent, or perform transfer service tit railroad stations. This agreement wa< revised as of Julie 1, 1912, and again as of August 1, 1917, and was in full force and effect when the United States Railroad Administration assumed control and operation of transportation by railroad.
On June 9, 1918, the United States Government, through tl·e Din=ctor tlcilesal ..l lta!Iroudm, ne=~ttiatc,l a Memor;;nduill of A:; Ilk tnrut ,.ill, ill, · four prlii.:pol ~r,s eompawea olleratlug at tlelt tiuic, hxltnliug tho S,sdlerll 1·lx_r,ns
pall, control. The American Railway Express Company, a joint operating company for the Admits, American, Wells-Fargo, and Southern Express Colutnunes, tvws inaiatail;etl after tho tora;:ration of fudelal control, ;,hd on 1'icptcutl_.r 1, 19_tt, ;tt the call of the Guarantee Clause (See. 209) of the Transportation Act., 70-20, a 'Uniform CoaG:ict for Expro,:as Gperal;ous ovef Rail Liana" wam prep;tred ;tad excerited betv-cell tlio Ainoricnn l;ailway Express Courpmi~ au,; Itaii 0,nipaiiies in tile United States, in·luding (lie Soabo;ini Air Liar l:ailway, c·hrrab; t1;e Exp·.;,SS f'<·tup;r·y iv::,: g..Fn'·ccl ti r ex: lo~ivr riellt au,l ireicilrce to control, conduct, arid transact all of the express transportation busmess ,,ver its I:ried.
As of March 1, 1929, the Rail Companies in the United Stated united in aclpiiri;ig the Amencarl Railway Express Company trough their own express agciicy, thereafter knotvii as the Railway Express A,emy, Iuc., and have since condo^ted the operations of the express business through such express agency, and on the Seaboard Air Line Railway in particular.
-.fhe record sho~:· teat the telnl', of lhc·. ctloitraot, efe-live July 1, 1917. renminod in effect until April 1, 19311, when the Railway E-xpreks Agem;v, file., placed in effect a fiat rate of five dollars ($5.00) per car on carload shipments sad, following that, cuode individual agrectnrlds wish ctrt;till of tl:e joint agents to handle express business on a straight commission basis nu,l to rcdtice the tranAer allowance below that specified in the agreement.
PETITIONERS' POSITION.-The petitioners submit that an agreement was entered into by the Southern Express Company in August, 1017, with a Comtuittee of the Order of Railroad Telegraphers in behalf of the joint railway express agents, that its obligations passed to the successor companies-first, the Anerican Railway Express Company, then the Raihvay Exlrress Agency, Inc., that these obligatiorud continued to be assumed until April 1, 1930, when in violation of the agreement the Railway Express Agency, Inc., took the action upon wbich this claim is Irs^P.
The petitioners fu.ther contend that the agents are employees of the Railway Express Agency, Ins., within the purview of the Amended Railway Labor Act and that even if the agreement, efrsetive August 1, 1917, should be held not to bind the Railway Express Agency, Inc., the Board should nevertheless take jurisdiction and decide the case oil its inerits as constituting a grievance to be adjusted under the terins of the law.
1n support of their contentions, the petitioners argue substantially as follows:They submit, ns Exhibit "D", copies of letters during 1925 between the superintendent of the American Railway Express Company and the General Chairman of the organization which relate to changes in rates of commissions; also, as Exhibit "E", It letter of April 9, 1930, from the superintendent of the Railway Express Agency, Inc., again relating to change in rate of commissions; as Exhibit "E", a letter of December 77, 1931, front the Alabama Public Service Commission relating to a petition for closing of an agency the hearing upon which involved consideration of the changes in ratcs of commissions, particularly as relating to the iuinimttm for express agents: as Exhibit "G", a letter of January 23, 1936, from the super!] ;tondent of the Railway Express Agency, Inc., changing the rate of commission paid individual agents; as Exhibit "E", another letter front the same officer dated June 5, 1935, relating to change in respect to guarantee; as Exhibit "I", alt exchange of letters in 1925, between the Vice President of the S. A. L. Railway Company, the General Chairman for the emldoyees, and the General Manager of the American Railway Express Company.
Tile petitioners urge that the contract between the joint agents and 11le South.·rn 6:~nress Company was talan over by the Anerieau Railway Express as oneof
I 'abilili;·s of (lie Southern Express Company, and they cite a number of de-visions of vortices Cott,.ts as holding that it ii- i not, ne<.essary that sucks contract be actually assigned in order to :nuke the -ilitrricul Railway Express Company answerable for the liability of the Southern Express Company.
Reliance is placed by petitioners upon the definition of j,Jo[ employcos by the Interstate Commerce Goltitnissioll in certain ti'ws ,t, iclolltt,y their. as Express Company employees.
Petitioners submit also that the filing of : ppliaation for blind is evidence of the e,ullbyees' relation to the, Exlne·s ~onl~an·:.
The testimony of Dr. Charles 1'. Neill. representative o.' the Southeastern Carriers in a hearing before the U. :S. It. 1t. Labor Bou;.d Ili Docket 90·34 which indicated tile right of the Expl.ess Company to employ and dismiss ill(, railway agents from Express Clnnl,any serf ic·o oils r·it,·rl :l> e~ta :)livaihlg the ell:pioyer tint( elnployce relation.
Petitioners also rely upon the recent act of Cullrr<·sd lcl~ittg incoille t;lx upon cinployees of carrier as dedldrri llle-s,.· r:tilwav s'atlolr agcllls ;:lso eall·tcyc"I its express agents its being also employees of the Espross Ageney.
RIISPONDENT"5 POSITION. The nw'~itioi· of the lGai·vv:ly is~p:cs :,~c·ncy is lhai the cotnplailtanl ll.l:lils P :e tl:)l cllllfote-.s: ..f il:c I:~p^clt :~: ~·_o.- ; ,,,I that III, llnevlnr·ie botllecli the joint it -eew-: ·.liil tb·· ;_)n'1 ·l·.l ? lt'tln(,ally i·: 1101 fill w:reeillcot i:, ~lllic;l Ill,, Or.'r-. of i:.li' . all ~ch .;:.·; ·r,. ;. .. pal.t" as they colltelld, is 0-'.6^11L :,11 illc :.a::· :.f 111;1 co:l;r u1 .,cllic.:l ll:l' r c«:uicd for tile jobtl agents by olle D. May. Although lm,~:is f1,nl.ral Cl,*!iimall for tile O. R. 'f. Its tile plaintiff alleges, llc signed this contract ·'I· er fl:c Ioint Agents" and the contract ain't stiin;l a'· si,nccl, .·. ..·t a wi,r:"I IV ill Isle O. R. T. The O. lt. T. not being n 1wrty to 1liat %ca)t·.il i. iiw;cfo:.c : .il not maintain a proceeding befnro this R,ull.d 1,_.od lilt 'I, .l .t.:;ct
The American Railway Express Company, llpolt the "xeclltl"ll cC ::::l:.rec·me l.llilway liollts all([ the oxlrress Company. Th: r·crllnli~;U,:l,s Vi,'cle :IF ihc s::ntc rote as tll("4(, (it Ike Southern 1"
icere eleterildned by the l.o'liracl ivirli fit,, Dile:: . t~crlcr::l ::tai it ... iv,,b ill(, .ante :ls those lu.eviouAy lanid by tile F,anhcln Exprc.y, rol,lpaap, r.<·, c ]lilt ,'.cpcndcrd upon an)- emon:et or ntl:le1.stiilidinri beirceli li·e .\iucrLan 12at1o·aly E<pl.est Colllllally ;tad the joint railroad ageids ,n. tile O. It. '_.
Tile ag'.colacnt with the 1>irector General bail n term pro:idillf that the cci:, , r·c,ltl)llldes ii·hi. h fnrnlod the Al:lc·rl:·a.i a:,ilw:ty Express Company woltld ill.n oler to 111- ttelr c"i.pul.ati.nl fill cr:llirml~. Emcelcr, lie tssigll lt:.·!it ,.fit; S,ititllel.ll 7:X[,1.,·:.5 cwrtl.a<t ll e- ",e. ill 1-1, ;JI., (I Ow Will ,I the new cr,utract kith the Dii.ector Genernl. That ·.'n:Gtt,t :l: ·< . w:ls :ic.c<'t,ied by the Atnericnit llailwaf 19xprc·a relnlau,;I, ;mil ;lo <.wiii.ro 1 icar, eicl. made between the joint agents and tile American R-:ilwiq. Mlxlitcss Company. vial lie srch coutl.act lifts eve: ileen exccute,i by tile Mdhl-:iy ::zl:ress A;avwy, Ii)c.
'the lespcnldent cited a decision of the Sluveme ~olll.t of Xorth Cclroohla in allswel. to lietitiollere' argument that acLn:d assignmeiu of contract was not necessary in order to bind the sn;cessor coinliany [Railway Expl.ci,s Agency, III,-,) and hell( Ihat citations by complainants were Caries involving fraud. Sevei.al other citations we°e made and emphasized ns supporting rcsponcient's position that the 'Llif,,ust 1017 contract is not in force.
In further support of their position, it was pointed out that beginning Soptember 1, 1920, the American Railway Express Company began the conduct of business under it contract known as "Uniform Contract for Express Operaticllls over Rail Lines", which continued in effect until March 1, 1923, when Ibe "Amended L,'niforin Cont).act for Express Operations over Rail Lines" I)c.came ef,'eclhe. These two contract:: « )ntainod aleong other thinc·s provisions for the railway company's employees to oct as agews of the Express Company. etc. On Febwtviry 28, 1929, ill, A::rerie;nl Railivvy Fxpr:as Company ,·,'ttsed 111 cearhK·l 1'l19~hS will :ill re:,'il':"t< its e\-stolwe i·'el'P a"`fgned b\ tbat c.olllpallc by specific ne:cellI`i bwtweell tile pal.lies concented. Ill particula1- l.ofel^n" ill labor ngrecltleuls, all tine l.:lrlie.s, tile Amel.ic,:ll !tailway
Expres, Company who relinqtd,,hed, the Raihtoy Express Agency, Itic., who accepted, -:rod th-; labor organization htvolced, joined.
Respondent submits that it has never included commission agents among itsReshnudcot a:ao itotkou the point that the Express Agency does not regard tliesc agents as eiaployecs in re,,poa:t to requirelncnts of the fortune Tax Law. Also, 'hat these joint agents are not subject to rules governing hours and workito;t conditiolis of employees of the Express Agency. These rules specify that they shall not apply to :ndividuds performing, special service requiring only a par: of their tittle from other employment or to those paid oil a commission basis.
Respondent's contention that joint agents are not employees, that the agreenull t of Aut(u~t 1917 is not fit force, and that the 0. R. T. is not fit it p,wsticoi to inainiain it la oce.i·diiog before this Board bused upon the August 1917 elicit orr with till, joint agents is relied oil to exclude this case from the jurisdiction of the Board under the Amended Railway Labor Act.
The Attorney for Respondent at oral hearing before this Division with the R(Icree was emphatic in the position that a grievance under the Amended Railway Labor Act must arise out of an agreement; if there is no agreement, accordht,( io his view, (here can be no grievance. In einphaslzing further the lack of responsibility on the part of the Railway Express Agency, Lie., arising out of fit(, contention that the joint agents are not employees of the Express Agency, Attorney for Respondent cited the circumstance in which the Express Agency might arrange with a drayman to look after express business . It is obvious, lie rnah:taiucd. that lit those circumstances the drayman would not in tiny sense he encored by the Amended Railway Labor Act in respect to his relations with the Railway Express Agency, Inc.
The respondent advanced further argument against covering this case in under the terms of the Amended Railway Labor Act to the effect that the contract which petitioners allege was violated antedates the Transportation Act.
OPINION OP REFEREE.-The Referee is riot disposed to enter into any notable analysis of the somewhat elaborate legal arguments advanced by the parlies to this dispute. For the most part he believes that they are not crucial to file basic issues involved in the case.
Irrespective of file present validity of the contract between tine joint agents and the Southern Express Company, effective August 1, 1917, and irrespective of the status of Mr. Slay as a signatory of that contract, the fact remains that the practice by which railway agents are paid commissions for services performed for companies other than their principal employer, the particular railroad company, is sufficiently general to be regarded as part and parcel of the system antler which industrial relations oil American railways are conducted. The recipient of commissions under such a system is fit an entirely different stains, both as regards his primary employer, the railway company, and its regards his secondary employer, in this case the Railway Express Agency, Inc., from a person who has occasional or fortuitous opportunity to increase his regular waged by supplementary earnings.
From whatever point of view regarded, the relationship between any given Railway, The Railway Express Agency, Inc., and tile joint agent who works on that railway, is a triangle no side of which can be removed or weakened wdW,out considering what the result will be to the other two sides.
If this Board is legally empowered to clarify the respective rights and responsibilities of the parties to this three-cornered arrangement, it will probably ire better in the long run for all concerned to have that done than it will for them to be continuously involved in needless disputes.
Since the Agreement of August 1917 was supposedly in force prior to April 1, 1930, we are warranted in assuming that commissions figured in negotiating the wage agreement with agents ml this Railway, and this fact cannot be ignored in dealing with cases in which commissions are involved.
The Referee finds, therefore, in this, as in any other case in which express commissions were considered in establishing the wage scale for agents on any railway, art obligation exists either to maintain the rate of connnissions intact or adjust the wage scale to compensate for changes in the rate of commissions until such time as the wage rates or the commissions, or both, are changed in accordance with Section d of the Amended Railway Labor Act.
Rut the relationship between express commissions on the (,lie hand and the rate wluch agents tire paid by the railway on the other goes cveu deeper than this. As long as a railway company and the Railway Express Agency, Inc., are in a position to shift responsibility back and forth they will be under strong pressure to do so with the result that the purposes of the Amended Railway Labor Act, in respect to thin three-cornered relationship, will be impeded. These purposes as stated in Section _ are as follows:
"SseTroc 2. The purposes of the Act are: (1) To avoid any interruption to commerce or to the operation of any carrier engaged farein; (2) to forl,id any limitation upon freedom of association among employees or any denial, as a condition of employment or otherwise, of the right of employees to join a labor organization; (3) to provide for the complete independence of carriors and of employees in the matter of self-organization to carry out the purposes of this Act: (4) to provide for the prompt and orderly settlement of all disputes concerning rates of pay, rules, or working conditions; (5) to provide for the prompt and orderly settlement of all disputes growing out of grievances Or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions."
In the same section, (lie purposes of the act are further amplified in the first paragraph under "General Duties." This paragraph reads as follows:
"It shall be the duty of all carriers, their officers, agents, and employees, to exert every reasotudde effort to make and maintain ogrcemcnts concornbtg rates of pay, rules, and working conditions, and 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."
The railways of the country and the Railway Express Agency, 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 rehidonships involving railway business direct, should be amicably, efilc·icntly, and promptly adjusted under the provisions of the law.
Argument was advanced in a case which is being decided concurrently with the instant case said from which part of the language of this decision is borrowed, Award 297 (TE-271) to the effect that the agents involved in that case were not employees of the Railway in respect to express business in such a way as to make the railway contractually liable for their commissions. In this case argument Involving elaborate definition of the abstract legal requirements requisite to establish the employer-employee relationship is advanced for the purpose of establishing in law, the fact that agents are in no sense employees of the Railway Express Agency, Inc.
The Referee hits noted carefully the citations in the these two cases, by which disclaimer of responsibility for commissions is supported. He is prepared to admit as a matter of abstract legal definition that the citations do in fact appear to support the argument advanced. However, as applied to the instant case, it is not possible to uphold disclaimer of respondent for obligation to maintain the rate of commissions, in the light of art instrument which, over a long period of years, was mutually regarded as an agreement by the joint agents and tire Sou'hern Express Company and its successors, and which specified definitely how it could be terminated. The instrument has all the carcnarks of being an agreement in respect to an employer-employee relationship. Without challenging any of the legal citations advanced, there would appear to be grave doubt whether a relationship which has continued over a long
period of years under an instrument which to all intents and purposes is an employer-employee agreement and, which contains specific stipulation for its termination, can suddenly be arbitrarily relieved of the attributes of an employer-cinployee relationship by ex parte action.
If, as in several other cases which have come before the Board, the parties had entered into some temporary arrangement, there are many circumstances which wouht permit ex parte denouncement of such an arrangement. Such action in at least one case has been upheld by this Referee Award 272 (VL-276). In the instant case, however, there can be no serious question that the fnstrumeat of August 1917, operaleil with all the force and effect of a regular agreement from its inception, until April 1, 1930, when it was terminated, if at all, by the ex pane action of the Railway Express Agency, Inc.
The fact that the ex parte action of the Railway Express Agcney, Inc., antidated by more than three years the passt:ge of the Amended Wuihvay Labor Act angle, as respondent maintains, weaken the arguments of petitioners that this Bmtrd should assume jurisdiction if the Agreement of April 1917 and the Act of 1934 were the only instruments and the only legislation by which the triangular relationship between joint agents, the railway involved in the particular case, liud the Railway Express Agency, In(-,, were covered. That, however, is not the situation. Triangular arrangements like the one here under consideration have been for many years standard practice on rlinerhan Railways and the Legislation of 1934 is amendatory of previous legislation which, under different forms and provisions, had to a considerable extent. the sane purpose in respect to industrial relations as the Amended Railway Labor Act of 7934. This was notably true of the Act of 1926.
In considering the eaCnce of these triangular relationships, the R;:feree cannot fail to note the close connection between the rallwaya Of Ihe, United States and the Railway Express Agency, Inc. Although the Express agency is a separate corporation, it is owned and controlled by the calri··rs over whose lines express business is carried. Ambiguity conerning the status or employees who serve both the railways and the Railway Express Agency, Inc.. anti whose total compensalion is made up of regular wages, hourly, daily, or monthly, as the case may be, paid by the railway, and of commissions paid by the Railway Express Agency, Inc., must inevitably make for confusion and discord instead of the prompt and orderly settlement ~of disputes which it was the purpose of the Amended Railway Labor Act, and substantially of earlier legislation, to promote.
For the purposes of the Amended Railway Labor Act which covers the Railway Express Agency-, Inc., as well as the railways, it appears clear that agents are primarily employees ~of the particular railway on which they work uul, secondarily, employees of the Railway Express Agency, Inc., whom they serve. Legal definitions aside, they serve the Railway Express Agency, Inc., year in and year out as agents and it is not vital to the issues involved whether we call them agents or employees or functionaries or any other title which we may use to describe their positions.
The salient fact is that express commissions are inextricably interwoven with the wages which railways contract to pay agents. It must, therefore, be held especially in view of the close property relationships between the railways and the Railway Express Agency, Inc., that the Railway by which an agent is Primarily employed and the Railway Express Agency, Inc., by which he is secondarily employed, are jointly and seccrally obligated to maintain the wage structure of agreements, insofar as express commissions are found to be an essential factor in determining the wages to be paid by the railway. In the judgment of the Referee, this ruling would be sound even Ilton^-11 the railways and the Railway Express Agency, Inc., were net, in these corporate relationships. as closely interwoven as they are. With them so interwoven, such a realistic approach becomes in;=soapable.
The most effective way in which the railways and the Railway Express Agency, Inc., can discharge the duties imposed by agreements amt by the Amended Railway Labor Act is to meet squarely the general question how matters involving express cmmnissinns supplemental to wages paid for service to the railway shall be handled. That is the responsible ·,vay to proceed and in the judgment 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.
In the case referred to above, Award 297 (T1?-271), decision on which is being rendered concurrently with decision in the instant case, the Referee was not advised of the existence of any forma'. agreement between tile Railway Express Agency and the Agents primarily employed by the olurier iavolved in that case. The Referee held, however, that the force of. ostabli~hed practice in respect to express commissions, taken together with tile fact that tile rate of connnissions on express business was a vital factor in determining the rate structure in respect to the service performed for the Railway, IDade the responsibility to pay roiaelissdoirs :It the rate contemplated when the rates oil the railway wore agreed to tantamount, in the pnrvil·w of flu, ADuudcd Railway Labor Act, to a tr'augu'.a_ ngracawnt between the llo ce pt lrT;r·s iI7 volved and subject to tcliaillatbon oiilc in conformity with the provisions of the Act.
In the instant case, whether or not we regard the agreement of August 1917 as still in effect, ttile long years during which that agreement ivas operative would in tile ,jugment of the Referee fortify the position which lie took in Decision on TE-271 (Award 297).
As in that case, the Referce is aware that in holding the railway concerned and the Railway Express Agoney, Inc., jointly aiol severally liable under agreements in wldch express commissions conelilide al factor in the wage structure of agents, the question remains open whether to make the Railway or the Railway Express Agency- or the two together respondents in cases involving express commissions. Repeating the language of the decision in Award 297 (Docket TIC 271), "The answer to that question would naturally depend upon the language of the partizudar agreement and the circumstances surrounding the case." In that case the Railway Express Agency, Inc., and the railway were both participants in the change in commissions of which enmplaint was made. '1 he Referee held in that case that the petitioners world have been within their rights under the agreement and under the Amended Railway Labor Act to have haled tile railway and the 12allw-ay Express Agency jointly before the Board; he also held that they were equally within their rights in making tile Railway tile respondent.
III tile instant case, tile long history of contractual relationships between the predecessors of tile Railway Express Agency, Ire., and the ,joint agents makes it proper for the rep:rsoltotives of the joint agents, tile O. R. T.. to hale the Railway Express Agency before this Boaifl. Since the O. It. T. has long been the acknowledged represelilative of agents in their dealings with tile railways and is Dow officially recognized as such represeiltatives, the Referee holds that the capacity in which D. May signed the agreement of August 1917 is not material to tile issues of this case.
Courts are frequently called upon to resolve legal inlpnsses of the kind which would result from a strictly- legalistic interpretation of tile contentious which have becil advanced in this case. The high authority of the Supreme Court of the United States may be invoiced for applying the rule of reason to an impasse of this kind and that is the way in which the Referee has been disposed to approach this decision. He, therefore, holds that the petitioners are within their rights in haling the Railway Express Agency, Ire., before this Board.