"The rules of construction applicable to a collective agreement rest on no different basis than those of any other employment contract. A party to an agreement has a legal right to breach its terms, but in so doing, subjects himself to damages resulting from the breach. In the absence of agreement, the measure of damages for breach of an employment agreement is the difference in the amount earned during the period of the breach and the amount that would have been earned but for such breach. This is a general rule of law which applies in every instance when the contract makes no reference to the subject. One who seeks damages for a breach of an employment agreement is obliged to mitigate such damage by using reasonable diligence in seeking other employment in the territory where he was employed. He may not sit idly by with impunity and create or accelerate damages to his own advantage. His earnings so made are deductible from the amount he would have made but for the breach in determining the amount of damages he is entitled to receive from the party committing the breach of contract. These are time honored principles of employment contract law which have been applied by courts generally. Their logic is unassailable from the standpoint of justice and right, and must be assumed to have been contemplated by the parties when they elected to make no reference to the subject in the controlling agreement here involved. If we are to have order and consistency, this Board must give effect to these principles until such time as they may be changed by voluntary agreement or the methods provided by the Railway Labor Act.

"Claimant is therefore entitled to recover the amount he would have received as wages had the contract been performed from July 12, 1950 to December 19, 1950, less what he earned in other employment during that period, or what he might by reasonable diligence have earned in other employment during such period."

CONCLUSION: The record shows that claimant proved before the Court, with competent medical testimony, that he was totally and permanently disabled; that Mr. Yaguda's name was properly dropped from the seniority roster; that under no circumstances should the monetary portion of this claim receive favorable consideration; and that precedents established by this and other tribunals support the action of the Carrier. Therefore, Carrier urges this Board to find that the claim is without merit and that it be denied in its entirety.

(Exhibits not reproduced.)

OPINION OF BOARD: On September 21, 1955, Claimant, a baggage and mail trucker at the Carrier's Albany Passenger Station, was injured during the course of his employment. Thereafter, he brought suit against the Carrier under the Federal Employers' Liability Act in the United States District Court for the Northern District of New York to recover $250,000 for his injuries. Upon trial of the action and on May 15, 1957, the jury returned a verdict of $35,000 in favor of the Claimant. The judgment thereon less the amount of Railroad Retirement Lien was paid by the Carrier on June 19, 1957.

On September 24, 1957, Claimant reported to the Carrier's Baggage Agent to return to service and was informed that he had been removed from and his name taken off the seniority roster as of May 27, 1957. The record

shows that the Superintendent's letter dated May 29, 1957 to the Baggage Agent advised that Claimant's name was being removed from the seniority roster and that "this man's physical condition is such that he is permanently disabled from resuming his regular work on the Railroad, and he is not to be reemployed." Claim for reinstatement to service and reimbursement for wage loss was filed on September 25, 1957.

In support of its claim, the Brotherhood, in substance, contends that the removal of Claimant's name from the seniority roster under the circumstances shown by the record constituted dismissal of Claimant without a hearing in violation of paragraph (a) of Rule 22 of the applicable Agreement, and that the refusal of Claimant's request to return to service denied him the benefits of Rule 42 of the Agreement.

Paragraph (a) of Rule 22 referred to reads:

"No employe shall be disciplined or dismissed without a hearing, but may be held out of service pending such hearing, which shall be prompt. At a reasonable time prior to the hearing, he shall be apprised of the charge against him and given opportunity to secure the presence of necessary witnesses."

Aforementioned Rule 42 states:

"Efforts will be made to furnish employement suited to their capacity and at rates of pay established for such positions, to employes who have become physically unable to continue in service in their present positions."

The Carrier, in substance, contends that paragraph (a) of Rule 22 is not applicable because Claimant was dropped from service on account of his total and permanent disability, and that the verdict of the jury in the court action brought by Claimant estops him from asserting his physical fitness to return to service and warranted his removal from employment.

The doctrine of estoppel relied on by the Carrier is bottomed on the concept that where it can reasonably be concluded from the record in the court action that the jury's verdict is an award of damages for total and permanent disability, payment of the judgment entered on such verdict constitutes payment of compensation for such loss of earning capacity. (See Awards 6740, 6215, 1672.) This basis for the estoppel principle was explained in the much cited case of Scarano v. Central R. of New Jersey by the District Court and, on affirmance on appeal, by the Court of Appeals, Third Circuit. The District Court (107 F. Supp. 622, 623) said:

"A reading of the record in Civil Action No. 9623 can leave no doubt in the mind of any reasonable person that the jury's verdict was based substantially on future loss of earning capacity. The medical expert of the plaintiff . . . testified that in his opinion Scarano was permanently and totally disabled . When the amount of the verdict . . is considered in light of plaintiff's yearly earning capacity . . . it is abundantly clear that the Railroad by its payment has compensated the plaintiff substantially for a permanent or protracted loss of earning capacity."

The Court of Appeals (203 F. 2nd 510, 513) said:

"At the same time, in the nature of the problem, it has been rightly pointed out by the Court of Appeals for the District of Columbia that in applying this rationalization `each case must be decided upon its own particular facts and circumstances.' Galt v. Phoenix Indemnity Co., 1941, 74 App. D.C. 156, 120 F. 2d 723, 726. The particular facts and circumstances we rely on are these. Plaintiff asserted in a judicial proceeding and introduced evidence tending to prove, that he was not able and would not be able to work. He claimed damages for this lost ability to earn wages. As a result of that claim, and by the aid of that judicial proceeding, plaintiff obtained from defendant a sum of money which by its size considering plaintiff's age and earning record, indicates that it was intended to compensate him for his loss of ability to earn wages for at least a substantial future period."

These decisions establish that the estoppel doctrine has been applied where it can reasonably be said on the basis of the record of the court action that the jury's verdict and payment of the judgment entered thereon represent compensation for alleged total permanent disability obtained by the plaintiff by means of the judicial proceeding.

The difficulty with applying these principles in this case is that from the record before it, this Board cannot reasonably conclude that the jury's verdict in favor of Claimant was to compensate him for total permanent disability. While the record shows allegations by Claimant in the court action tantamount to claiming such disability and that medical testimony presented by him in court was to similar effect, the record also shows that the same medical testimony also informed the jury that Claimant suffered less than total disability. The Carrier's Submission summarizes the Claimant's medical testimony in the court action, in part, as follows (Record, pages 33-34)

"The trial resumed at 10:00 A. M., May 9, 1957. Dr. Joseph Steinbach was called by the plaintiff. He had been Mr. Yaguda's physician since 1951 when he began treating Mr. Yaguda for diabetes. Dr. Steinbach' (sic) diagnosis was coronary disease, diabetes and low back strain. He testified that the accident was a competent producing cause of this man's heart condition and of his back condition and that he always would have partial permanent disability and would never again be able to do work requiring lifting, but could perform only desk work in the future. * * * On May 10, 1957, Dr. Bucci was called by the plaintiff. He testified that Mr. Yaguda should not do any work requiring lifting, such as was required on his railroad job." (Emphasis supplied.)

In this posture of the record here, it would be pure speculation for this Board to conclude that the jury in reaching its verdict completely ignored the medical testimony referred to in the above quotation from the Carrier's Submission and based its verdict entirely on the assertions of total permanent disability.

On the basis of the conclusions stated above, the Board must find that the record does not support removal of Claimant's name from the seniority roster for the reasons relied on by the Carrier and that he was not subject to dismissal without a hearing as provided in Rule 22.

Concededly, paragraph 3 of the Statement of Claim was asserted as "a penalty for the Agreement violation." No basis for the imposition of

such penalty has been shown. Nor does the record show Claimant's physical condition as of the time he sought to return to service or what duties he claims his physical condition would have permitted him to perform.

FINDINGS: The Third Division of the Adjustment Board, upon the whole record and all the evidence, finds and holds:

That the parties to this dispute waived oral hearing;

That the Carrier and the Employes involved in this dispute are respectively Carrier and Employes within the meaning of the Railway Labor Act, as approved June 21, 1934;

That this Division of the Adjustment Board has jurisdiction over the dispute involved herein; and

That the Agreement was violated.

AWARD