Form 1 NATIONAL RAILROAD ADJUSTMENT BOARD Award No. 28635
THIRD DIVISION Docket No. MS-28218
91-3-87-3-799
The Third Division consisted of the regular members and in
addition Referee John B. LaRocco when award was rendered.
(Vincent T. Dicherico, Leslie T. Morgan, Kenneth Orman,
(John P. Halliday, Richard Hedge, August Trejo, James
(Howard, Howard Lewis, John W. Tamborski, William Pratt,
(Truman Swiney, Robert L. Capp, Barry Schilling, Bob
(Derrick, Donald Hostnick, Bill D. Morgan, and Jeff
(Dicherico
PARTIES TO DISPUTE:
(Union Pacific Railroad Company
STATEMENT OF CLAIM:
"The Railroad broke its promise that CLAIMANTS would continue to do
all ramping and deramping work at the Railroad's Oakland, California facility
no matter who the Railroad contracted with to operate the facility. The written agreement in dispute
notice."
FINDINGS:
The Third Division of the Adjustment Board upon the whole record and
all the evidence, finds that:
The carrier or carriers and the employe or employes involved in this
dispute are respectively carrier and employes within the meaning of the
Railway Labor Act as approved June 21, 1934.
This Division of the Adjustment Board has jurisdiction over the
dispute involved herein.
Parties to said dispute were given due notice of hearing thereon.
I. INTRODUCTION
This case comes to us from the United States Court of Appeals for the
Ninth Circuit. 809 F.2d 607 (9th Cit. 1987). Ruling that this Board has
exclusive jurisdiction to decide this case, the Ninth Circuit wrote,
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"Plaintiffs argue that the Railway Labor Act does
not apply because one of the defendants, [Western
Pacific] Transport, is not a railroad. However, it
is necessary to look at the substance of the dispute.
E.G., id.; Pan American World Airways v. United
Brotherhood of Carpenters, 324 F.2d 217 (9th Cir.
1963), cert. denied, 376 U.S. 964 (1964). Viewed
from this perspective, this case is essentially a
railway labor dispute between the railroad and
certain of its employees. This dispute arises out
of a labor agreement negotiated by a labor union on
behalf of certain of its members and requires inter
pretation of the labor agreement. When a railway
labor dispute involves the interpretation of a
collective bargaining agreement, the Railway Labor
Act requires that it be submitted to arbitration; the
federal courts do not have jurisdiction to resolve
the dispute. International Ass'n of Machinists v.
Aloha Airlines, 776 F.2d 812, 815 (9th Cir. 1985);
Fechtelkotter v. Air Line Pilots Ass'n Int'l, 693
F.2d 899 (9th Cir. 1982). [Footnote omitted.]
Congress designed the Act to leave the resolution of
many types of railway labor disputes to the machinery
of arbitration, mediation, and bargaining. Klemens
v. Air Line Pilots Ass'n Int'1, 736 F.2d 491
(9th Cir. 1984); e.g., Crusos v. United Transp.
Union, Local 1201, 786 F.2d 970 (9th Cir. 1986). The
Act reflects strong policies in favor of arbitration
and against judicial intervention. Fechtelkotter,
693 F.2d at 901.
The defendants argue that there is no agreement
binding the parties. Their position could lead to
the conclusion that no interpretation of an agreement
is involved because there is no agreement at all and
that federal court jurisdiction is therefore proper.
E.g., Goclowski v. Penn Central Transp. Co., 571 F.2d
74 , 756 (3rd Cir. 19 ). However, Switchmen's Union
of North American v. Southern 'Pacific Co., 398 F.2d
44 , 7 (9th Cir. 1968), held that 'where the posi
tion of one or both of the panties is expressly and
arguably predicated on the terius of the agreement,'
the suit involves the interpretation of an agreement
and must be submitted to arbitration. The plaintiffs
have expressly predicated this action upon the terms
of the agreement. See, e.g., Brotherhood of Railway
Carmen v. Pacific Fruit Express Co., 651 F.2d 651,
652 (9th Cir. 1981) (court followed Switchmen's Union
and held that if agreement is 'arguably susceptible'
to party's construction it must be submitted to ar
bitration pursuant to the Act).
Form 1 Award No. 28635
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91-3-87-3-799
The Court of Appeals ruling obviates our otherwise numerous and serious doubts
concerning this Board's subject matter jurisdiction over any aspect of this
case.
II. BACKGROUND AND SUMMARY OF THE FACTS
For more than 25 years prior to 1979, the former Western Pacific
Railroad Company (WPRR), which merged into the Carrier in 1982, owned but did
not operate its ramp facility at Oakland, California. In the late 1970s, the
Western Pacific Transport Company (WPTC), a wholly owned subsidiary of the
WPRR, loaded and unloaded trailers from rail cars at the ramp facility. Also,
WPTC performed local cartage functions. Both the ramp workers and the truckers were employees of WPT
According to the Union's Assistant Shop Steward, the WPRR asked the
Union, in early 1979, if it would agree to permit the WPTC to spin off the
ramp functions from the cartage service. By splitting the work between two
separate corporate identities, the WPTC would avoid making duplicate retirement contributions on beh
(See the March 21, 1988 Declaration of Leslie Morgan.] The Union was amenable
to separating the ramp facility from the trucking operation but it was concerned that the WPRR could
facility leading to the permanent displacement of the current ramp employees.
In his February 5, 1986 Declaration, Union Business Agent Martin L. Frates
emphasized that the Union's consent to splitting the work was conditioned on
the WPRR giving present ramp employees successor rights.
The parties struck a bargain.
On April 16, 1979, the Union, WPTC and Feather River Intermodal
Services Company (FRISCO), the new company created by the WPTC to operate the
ramp, entered into what the parties generically label the "Transfer Agreement," to govern the shifti
sentence of the prefatory paragraph of the Transfer Agreement reads: "Prior
to executing this Agreement, the Employer agrees that it shall be submitted to
the Western Pacific Railroad Company for review and approval." (The Transfer
Agreement does not identify the party referred to as "Employer" but the heading of the Agreement
signed the Agreement as a primary party. This suggests that the "Employer"
was the WPTC.) WPRR Vice President John dray approved the Transfer Agreement
immediately before the parties signed it. -Article 1, Paragraph 7 of the Transfer Agreement, which i
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"The continued successor rights of F.R.I.S.C.O.
employees in the event the ramping and deramping
work is contracted out to another carrier shall be
guaranteed by the Western Pacific Railroad Company."
Shortly after April 16, 1979, WPTC employees elected either to stay
with WPTC or to transfer with their seniority intact, to FRISCO. Leslie
Morgan, in his January 21, 1986 statement, declared that generally, the more
senior employees went with FRISCO because they believed that the WPRR had
forever guaranteed them the right to perform the ramp work. Claimants herein
are seventeen of the approximately nineteen employees who relinquished their
employment with WPTC and began working with FRISCO under the auspices of the
Transfer Agreement. The Union and FRISCO later incorporated the Transfer
Agreement into their collective bargaining agreement via a December 13, 1979
Rider. (See Article 7 therein.]
There are two major factual disputes surrounding the negotiations
culminating in the Transfer Agreement. First, Claimants contend that a WPTC
negotiator, Kent Goldsworthy, orally promised the Union that Claimants would
be guaranteed lifetime employment on the ramp regardless of what corporate
entity the WPRR retained to perform the work. The Carrier denies that there
was any direct oral agreement between the WPRR and the Union. Second, Claimants interpret Article 1,
of lifetime employment. Conversely, the former President of WPTC, Dennis Van
Wagner, in his Declaration dated February 20, 1986, claimed that Article 1,
Paragraph 7 was never intended to confer Claimants with lifetime employment.
Mr. Goldsworthy, who became the General Manager of FRISCO, referred to the
provision as guaranteeing FRISCO employees the ramp work should it be contracted to an independent c
2, 1980] This Board will address these factual disputes later in its Opinion.
Nevertheless, Article 1, Paragraph 7, at the very least, can be aptly characterized as a successor r
In 1980, the WPRR sold FRISCO to Reacon, a corporation totally unaffiliated with the WPRR. Reaco
bargaining agreement between FRISCO and the Union-which expired in 1982.
John Skonberg, FRISCO's chief spokesperson during the 1982 negotiations, declared that in 1982,
labor agreement vitiating all side bar contracts and past practices. [See
Declaration of John M. Skonberg dated March 3, 1986.] Most notably, FRISCO
sought to eliminate the successorship clause. Fearful that the successor
rights provision would not be renewed, thd_Union's Business Agent wrote to now
WPRR President, John Gray, asking whether the
WPRR
would approve successor
rights for FRISCO employees. [See letter from Business Agent Jack Spratt to
John Gray dated September 24, 1982.] Mr. Gray responded on October 1, 1982 as
follows:
Form 1 Award
No.
28635
Page 5 Docket
No.
MS-28218
91-3-87-3-799
"As you are aware, Feather River Intermodal Services
Company and The Western Pacific Railroad Company are
separately owned and separately operated companies.
Therefore, we have no control whatsoever over the
labor relations of Feather River Intermodal Services
Company.
I have no authority to dictate the labor relations
policies of Feather River Intermodal Services Com
pany, and I have no desire or intention to meddle in
those matters.
Accordingly, I must advise you that we will not in
any way guarantee the Successor's Rights of the
employees of Feather River Intermodal Services
Company or any other unrelated company."
Replying to Mr. Gray's letter on October 6, 1982, Union Business
Agent Frates reiterated the Union's view of WPRR's contractual commitment
under the Transfer Agreement. In the second paragraph of his correspondence,
the Union Business Agent announced:
"Please let me remind you that the Western Pacific
Railroad guaranteed certain rights to their employees
as outlined in the Transfer Agreement dated April 16,
1979. Teamsters Local 70 will enforce the Transfer
Agreement and expects the Western Pacific Railroad,
W.P.X. Freight Systems, Inc., Western Pacific Transport Company, Feather River Intermodal Services,
to live up to their obligations and commitments to
their employees. We will hold all the above companies liable for all lost wages, benefits, etc."
Both Shop Steward Morgan and Union Business Agent Spratt emphasized
that the WPRR was completely uninvolved in the 1982 negotiations between Union
and FRISCO. [See March 21, 1988 Declaration of'Leslie Morgan and February 27,
1986 Declaration of John G. Spratt.] Mr. Skonberg confirmed that the WPRR was
not a participant in the 1982 bargaining sessions and further related that the
Union was unsuccessful in making the WPRR'a party to the 1982 Union-FRISCO
collective bargaining agreement.
A successor rights provision does' not appear in the December 9, 1982
collective bargaining agreement between the Union and FRISCO.
The Carrier calls our attention to an integration or "zipper" clause
in the December 9, 1982 Union-FRISCO Agreement. Article XV, Section 13
provides:
Form 1 Award No. 28635
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91-3-87-3-799
"This Agreement supersedes all previous agreements
and understandings, whether written or oral, and any
preexisting such [sic] agreements are null and void.
This Agreement represents the complete understanding
between the parties and shall not be modified except
by mutual consent expressed in writing by both par
ties. The Employer agrees not to enter into any
agreement or contract with its employes, individually
or collectively. Any such agreement shall be null
and void."
On January 10, 1986, the Carrier placed the Oakland ramp operation
under the control of its wholly owned trucking subsidiary, Union Pacific Motor
Freight (UPMF). Although the UPMF eventually hired three Claimants, it originally replaced all Claim
Union's hiring hall.
The UPMF's decision to use workers other than Claimants to perform
Oakland ramp duties triggered protracted litigation.
On February 7, 1986, the Union and the nineteen FRISCO employees who
had transferred from the WPTC instituted an action in United States District
Court for the Northern District of California (No. C86-0364WWS) for injunctive
relief and money damages against the Carrier, the WPRR and the WPTC. The suit
was brought under 28 U.S.C. § § 1331 1337 and 29 U.S.C. § 185. The latter
citation is commonly known as Section 301 of the National Labor Relations Act.
Specifically, the Union sought to enforce Article 1, Paragraph 7 of the Transfer Agreement and praye
the Carrier to direct the UPMF to hire Claimants, assign them the ramp work
and to continue to employ Claimants so long as the ramp work existed.
The Carrier did not contest the Federal Court's jurisdiction. It
raised two primary defenses. First, the WPRR was not bound by the Transfer
Agreement. Second, the zipper clause in the 1982 Union-FRISCO collective
bargaining agreement extinguished the successor rights clause in the rider
(Transfer Agreement) to the preceding collective bargaining agreement. At a
March 7, 1986 Hearing, the United States District Court granted the Defendants' Motion for Summary J
not come forward with an agreement signed1by the WPRR. The record of the
March 7, 1986 Hearing is unclear as to whether the Court found a triable issue
of fact regarding the WPRR's liability, under alter ego or agency legal theories, for any
approved the Transfer Agreement before it teas signed by two of its wholly
owned subsidiaries, FRISCO and the WPTC. In any event, the Court ruled that
FRISCO employees, including Claimants, took whatever rights they acquired from
the WPRR into their collective bargaining relationship with FRISCO. If the
employees went into the 1982 bargaining round with the successorship clause,
they did not come away from the bargaining table with the clause intact.
Apparently, the Court relied heavily on the tight integration clause (Article
15, Section 13) in the December 9, 1982 collective bargaining agreement.
Form 1 Award No. 28635
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91-3-87-3-799
When they appealed the District Court's judgment to the Ninth Circuit
Court of Appeals, seventeen of the nineteen individual plaintiffs (Claimants
herein) retained their own legal counsel. On appeal, Claimant argued that the
WPRR was forever bound by the successor rights clause in the Transfer Agreement since it derived a l
ramp functions, from the same agreement. Thus, Claimants characterized the
Transfer Agreement as three separate contracts: between the Union and FRISCO,
the Union and the WPTC and the Union and the WPRR. The defendants raised
jurisdiction as an issue on appeal to the extent that Claimants were seeking
to enforce an agreement directly between either Claimants or their representative on the one hand an
considering the merits of the dispute since the controversy should have been
dismissed for want of jurisdiction. Thus, the Ninth Circuit vacated the
District Court's decision. The Union, but not Claimants, petitioned the Ninth
Circuit for rehearing. The Union represented to the Ninth Circuit that if the
case was remanded to the District Court, the Union would amend its complaint
to delete any prayer for injunctive relief against the Carrier to solidify
jurisdiction under the National Labor Relations Act. The Ninth Circuit denied
the petition on April 29, 1987. The Union filed a Writ of Certiorari which
the United States Supreme Court denied on October 5, 1987. On October 28,
1987, the District Court entered an order dismissing the case for lack of
subject matter jurisdiction.
After the Ninth Circuit's ruling that this dispute was governed by
the Railway Labor Act, the Carrier's highest designated officer and Claimants'
attorney met to discuss the Claim in Oakland on July 14, 1987. Unable to
settle the dispute, Claimants proceeded to this Division. They seek back
wages of approximately $507,000.00 per year, annual fringe benefits of an
estimated annual value of $102,000.00, ten years future compensation totalling
approximately $6 million (plus interest at the rate of twelve percent) and an
additional $3 million to be spread equally among Claimants for the stress,
pain and suffering stemming from the financial difficulties Claimants have
experienced since being replaced at the ramp.
III. RAILWAY LABOR ACT PROCEDURES
The Carrier urges us to summarily'dismiss this Claim because it is
riddled with numerous and fatal procedural defects. While we are overruling
all the Carrier's procedural challenges, each contention warrants some discussion.
First, the Carrier contends this Board lacks jurisdiction to adjudicate this case since Claimant
defined in Section 1 Fifth and Section 1 First of the Railway Labor Act. 45
U.S.C. § 151. Section 151 Fifth defines an employee as a person employed by
an employer subject to the Railway Labor Act. In turn, Section 151 First
specifically excludes a corporate entity performing trucking service, even if
a carrier controls the trucking firm, from the definition of a carrier.
Form 1 Award No. 28635
Page 8 Docket No. MS-28218
91-3-87-3-799
The Court of Appeals judgment implicitly rejected the notion that
Claimants are beyond the definition of employees in the Railway Labor Act. It
viewed this case as a "...dispute between the railroad and certain of its
employees." [Emphasis added.] Furthermore, Claimants herein allege that a
direct oral guarantee existed between the WPRR and the Union. As the Ninth
Circuit stated, issues concerning whether or not such an agreement exists, the
terms of any oral promise, and the interpretation of those terms are relegated
to this Board because these issues are arguably premised on a Railway Labor
Act agreement. We have jurisdiction to decide these issues especially since
Claimants are not trying to enforce the successor rights clause against the
UPMF which is a trucking firm outside the coverage of the Railway Labor Act.
However, we will discuss the exact extent of our jurisdiction later in this
opinion.
Second, the Carrier argues that this Board lacks jurisdiction under
Section 3 First (i) of the Railway Labor Act since the dispute does not grow
out of an interpretation of an agreement involving the WPRR. 45 U.S.C.
S
153
First (i). The Carrier's jurisdictional challenges begs the question. As we
explained in the prior paragraph, the existence of an agreement between the
WPRR and either Claimants or the Union is a disputed fact. This Board has the
power to answer the threshold question: was there an agreement between the
WPRR and the Union?
Third, the Carrier contends that Claimants failed to properly progress the Claim on the property
U.S.C. § 153 First (i). While the Carrier correctly points out that Claimants
did not follow the grievance procedure in the 1982 collective bargaining agreement between the Union
Transfer Agreement and the alleged WPRR-Union oral agreement, do not contain a
claim handling procedure. Thus, as Claimants contend, there is no usual practice for handling claims
concurred that jurisdiction lay under Section 301 of the National Labor Relations Act, the Carrier i
handled, from its commencement on the property, in accord with the Railway
Labor Act. In addition, Claimant satisfied the conference requirement in
Section 2, Second, of the Railway Labor Act.
Fourth, the Carrier charges that Claimants did not file this case
with the appropriate Division of the Adjustment Board but it noticeably
neglects to identify which of the other three Divisions is the appropriate
Division. Section 3 First (h) of the Railway Labor Act contemplates separate
jurisdiction for each Division but the statute does not preclude some potential overlap, at least, w
employees progressing the claim. 45 U.S.C.
S
153 First (h). We need not
decide if this Claim could have been properly filed with another Division
because Claimants can reasonably be classified as "freight handlers" which is
an employee group expressly listed in Section 3 First (h).
Form 1 Award No. 28635
Page 9 Docket No. MS-28218
91-3-87-3-799
IV. THE POSITIONS OF THE PARTIES
A. Claimants' Position
The Union would never have agreed for Claimants to permanently relinquish their seniority over l
guaranteed them lifetime employment on the Oakland ramp. By splitting the
drayage and ramp functions, the WPRR reduced its expenditures for retirement
contributions. The price for receiving this benefit was the WPRR's promise
that Claimants would continue to perform the ramp work regardless of what
corporate entity actually operated the ramp facility. The WPRR's successor
now wishes to renege on this promise after the WPRR has already reaped substantial savings.
The WPRR's officers entered into a binding oral agreement with the
Union to guarantee Claimants' jobs for their lives. Oral agreements under the
Railway Labor Act are enforceable. Third Division Award 20190. The Transfer
Agreement was formulated as a result of the independent verbal arrangement.
Thus, the guarantee which the WPRR entered into with the Union is described in
the Transfer Agreement. The WPRR did not sign the Transfer Agreement simply
because there was not an historical collective bargaining relationship between
the Union and the WPRR. The oral promise is clearly binding on the WPRR even
though it evolved during negotiations between the Union and the WPTC because
the management negotiators held interlocking positions with the WPRR and the
WPTC. Since the WPRR approved the Transfer Agreement before its execution,
the WPRR implicitly verified its previous promise to guarantee Claimants
lifetime employment.
The verbal contract between the Union and the WPRR never expired.
The 1982 collective bargaining agreement did not affect existing agreements between the WPRR and the
FRISCO as opposed to either the WPRR or the WPTC. Assuming, arguendo, that
the integration clause in the 1982 Agreement voided the successor rights
clause in the Transfer Agreement, the integration provision did not extinguish
the WPRR's promise of guaranteed lifetime employment for Claimants. Indeed,
it was logical that the WPRR was uninvolved in the 1982 negotiations between
FRISCO and the Union since the WPRR no longer had a parent-subsidiary relationship with FRISCO. The
ruling of the Federal District Court on the Defendants' Motion for Summary
Judgment. The Ninth Circuit Court of Appeals vacated the lower Court's findings. Similarly, Mr. Gray
1979 verbal contract, the WPRR would first have to~satisfy the notice and
negotiation requirements in Section 6 of the Railway Labor Act. 45 U.S.C. §
156. Otherwise, the status quo endures indefinitely. Inasmuch as there has
been no further bargaining between the Union and the WPRR, the guarantee
survives.
Form 1 Award No. 28635
Page 10 Docket No. MS-28218
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Besides the description of the oral guarantee set forth in Article 1,
Paragraph 7 of the Transfer Agreement, the past practice of the parties evidences the existence of t
the parties consistent method of dealing which they followed for decades prior
to 1979. The same people continued to perform the ramp work regardless of
what corporation the WPRR retained to actually operate the facility. The
Transfer Agreement coupled with the past practice proves the existence of the
1979 oral agreement.
The Carrier breached the verbal agreement when it failed to insure
that Claimants would be assigned to perform the ramp work when the Carrier
retained the UPMF to operate the ramp.
Alternatively, the WPRR is the guarantor or surety of the promise
made by its subsidiary, the WPTC, in Article 1, Paragraph 7 of the Transfer
Agreement. Even though the WPRR did not sign the Transfer Agreement, it
authorized and then ratified the actions of the WPTC. The WPRR approved the
Transfer Agreement before it permitted its two subsidiaries, WPTC and FRISCO,
to sign the contract. Absent the WPRR's ratification of the Transfer Agreement, the successor rights
WPRR had ultimate control over the ramp work. When it approved the Transfer
Agreement and accepted the benefits flowing from the Agreement, the WPRR
adopted Article 1, Paragraph 7.
B. The Carrier's Position
The United States District Court found that Claimants failed to
produce any evidence binding the WPRR to the successorship clause in the
Transfer Agreement. When Claimants brought their action in Federal Court,
they did not base their Claim on any oral agreement between the Union and the
WPRR. This aigument arose as an afterthought when Claimants lost in District
Court. Indeed, they constantly changed their position throughout the lawsuit.
First, Claimants argued that the guarantee was exclusively set forth in the
Transfer Agreement, a labor agreement subject to the National Labor Relations
Act. When they did not prevail on that allegation, Claimants alleged the WPRR
was directly bound by the Transfer Agreement because it had approved the Agree
ment. Since the Court of Appeals rejected that allegation on jurisdictional
grounds, Claimants are now attempting to resurrect the guarantee in the Trans
fer Agreement in direct circumvention of the District Court's ruling. When
ever they encounter a legal obstacle, Claimants devise a novel and incredible
allegation in a desperate effort to substantiate their frivolous Claim.
a
It is simply unreasonable that the WPRR and the Union would not reduce to writing a contract whi
employment guarantee. The alleged verbal agreement leaves many unanswered
questions. For example, would the lifetime guarantee prevent the trucking
firm from discharging one of the Claimants for cause? This is an illustration
of the kinds of items that would be covered in a written agreement.
Form 1 Award No. 28635
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Next, the WPRR was not a party to the Transfer Agreement. Regardless
of whether or not it approved the Transfer Agreement, the WPRR never adopted
the Agreement.
Even if this Board finds that the WPRR was a party to the Transfer
Agreement, Article 1, Paragraph 7 was extinguished by Article 15, Section 13
of the December 9, 1982 Union-FRISCO Agreement. The strict integration clause
nullified all Transfer Agreement provisions and any past practice not carried
forward by the express terms of the 1982 Agreement. The successorship clause
was not renewed in the 1982 Agreement. As the FRISCO negotiator stated,
Reacon's primary goal was to negotiate a single, unified collective bargaining
agreement unencumbered by any prior promises, past agreements or unwritten
practices. The Union realized that unless the successor provision was incorporated into the 1982 Agr
so-called rights to lifetime employment. Thus, the Union Business Agents
contacted the WPRR seeking assurances. The WPRR President truthfully responded that the WPRR would n
rights. Despite being placed on notice that the WPRR would not independently
guarantee Claimants' rights, the Union entered into the 1982 Agreement knowing
it did not contain a successor rights provision. Again, the District Court
unequivocally ruled that the Transfer Agreement's successorship clause did not
survive the 1982 Union-FRISCO negotiations.
Finally, Claimants' requested remedy is excessive. Claimants have
neither mitigated their damages nor cited any contractual provision providing
for back pay, front pay and interest. Damages should be restricted to Claimants' lost earnings.
V. DISCUSSION
A verbal agreement negotiated under the auspices of the Railway Labor
Act is enforceable. It is, however, difficult, and often impossible, to prove
the actuality and the precise terms of a verbal contract. Claimants bear the
heavy burden of showing the existence of a contractual relationship between
the Union and WPRR and the major provisions of such an agreement. After carefully perusing the volum
Even if the Board credits the veracity of the Union Business Agents
who declared that WPRR officials intended to promise Claimants lifetime employment, not all r
bargaining automatically rise to the sacroganct status of a collective bargaining agreement. Holding
bargaining table. During intensive bargaining sessions, the parties explore
many alternatives which are ultimately excluded from their final agreement.
Without some definitive proof, it is difficult to distinguish an absolute
promise from a mere proposal. Thus, an oral representation communicated
across the bargaining table is not a de facto binding agreement.
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Claimants nonetheless contend that this particular oral representation matured into a contract s
Paragraph 7 of the Transfer Agreement. We disagree. Article 1, Paragraph 7
is a successor rights clause. Claimants never explained how they translated
Article 1, Paragraph 7 into a guarantee of lifetime employment. Moreover, if
the WPRR directly contracted with the Union to guarantee Claimants lifetime
employment, the parties surely would have addressed some of the circumstances
surrounding such a guarantee. To this day, the parties disagree as to the
exact meaning of the successor rights provision in the Transfer Agreement.
More importantly, any promise of lifetime employment would normally cover such
possible occurrences as the disability, discharge or resignation of a ramp
employee; the duration of the guarantee in terms of retirement; the duration
of the guarantee in terms of the volume of ramp work from year to year; the
ability of FRISCO or any successor to use ramp employees in another position
to offset the guarantee; who is eligible for the guarantee (Article 1, Paragraph 7 could easily appl
work); and a procedure for resolving disputes should the Union believe the
WPRR breached the Agreement. Experienced Union and WPRR negotiators would
almost certainly answer these questions and reduce them to writing. Thus, the
single sentence in Paragraph 7 of Article 1 of the Transfer Agreement is
merely a successorship clause rather than a guarantee of lifetime employment.
Therefore, Article 1, Paragraph 7 does not constitute a restatement of the
alleged oral contract of lifetime employment between the Union and the WPRR.
In addition Claimants did not allege the existence of this supposedly
all encompassing oral agreement until Claimants filed their Submissions with
this Board. In their appeal from the decision of the United States District
Court, Claimants argued that the WPRR was bound by the terms and conditions of
the Transfer Agreement but did not suggest the existence of a direct contract
between the Union and the WPRR. If this critical oral contract existed, it
surely would have been included as a cause of action in the complaint filed on
February 7, 1986. Indeed, Claimants, in their Notice of Intent to file an Ex
Parte Submission with this Board, clearly indicated that the "written agreement" in dispute was the
oral agreement for the first time before this Board shows that Claimants were
concerned that the vacated District Court judgment would ultimately prevail.
The District Court's finding, of course, would not apply to an indefinite
labor agreement negotiated under the Railway Labor Act. The status quo would
be preserved until the WPRR complied with Section 6 of the Railway Labor Act.
Claimants belatedly raised oral agreement allegation dilutes the persuasiveness of Claimants'
i
Therefore, Claimants have not proved, with sufficient evidence, the
existence of an oral agreement between WPRR and the Union.
When it ruled that this Board had exclusive jurisdiction over this
dispute, the Ninth Circuit Court of Appeals carefully couched the language
in its opinion to apply to a Claim arguably predicated on an agreement between
a WPRR and Claimants. The Ninth Circuit refrained from broadly ruling that,
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absent an agreement between the WPRR and Claimants, the Federal Court would
still be deprived of jurisdiction. This Board interprets the Ninth Circuit's
opinion to narrowly provide for our adjudication of the dispute between Claimants and the Carrier to
agreement between the WPRR and the Union. Since we have found inadequate
proof of the existence of such an agreement, our jurisdiction ends. The
question of whether the WPRR is bound by the successor rights provision in the
Transfer Agreement is beyond our authority. The WPTC and FRISCO are employers
under the National Labor Relations Act. Both parties concur, and the Ninth
Circuit Court of Appeals did not directly refute their view, that the interpretation of the Transfer
litigation under the National Labor Relations Act. By deferring to this
Board, the Court of Appeals was promoting the strong policy in favor of arbitration and against judi
found an agreement between the WPRR and the Union and also adjudged that such
an agreement gave Claimants lifetime employment, judicial intervention would
be unnecessary. However, whether or not the WPTC, acting as an agent for its
parent company, entered into the successor rights clause for the benefit and
on behalf of the WPRR, is an issue involving the interpretation and application of the Transfer Agre
agreement subject to the National Labor Relations Act. Alternatively, the
WPRR may have ratified the promises of its subsidiary. If so, the next issue
would be whether the guarantee was still operative in January, 1986, when
Claimants lost ramp employment.
This Board emphasizes that we have only concluded that WPRR did not
enter into a collective bargaining agreement with the Union. We do not express any opinion on whethe
liable for insuring Claimants' successor rights contained in the Transfer
Agreement. Nothing in our Opinion should be construed to either endorse or
reject the arguments raised by the parties with respect to the Transfer Agreement and the December 9
To reiterate, since Claimants have not,proven the existence of a
verbal agreement between the WPRR and the Union, there is not any agreement
allowing us to enforce the alleged individual employment rights. Fourth
Division Award 3911. The remainder of the Claim is dismissed for want of
jurisdiction.
A W A R D
Claim denied, in part, and dismissed, in part, in accordance with the
Findings.
Form 1 Award No. 28635
Page 14 Docket No. MS-28218
91-3-87-3-799
NATIONAL RAILROAD ADJUSTMENT BOARD
By Order of Third Division
Attest:
ancy J. a -Executive Secretary
Dated at Chicago, Illinois, this 29th day of January 1991.