1F 1)

19911

INIERSTAfE

COMMERCE CuMMiSSlON

This is an arbitration proceeding arising under Article I, Section !: of the provisions of ":ear York Dock Rail~.av - Control - HroUclyn Eastern District, 360 !CC 60 (1979), aff'd sub nor. New Yor'c Dock Railway v. United States, 609 F. 2d 83 (2d. Cir.1979).
The parties in this dispute are Louis D. Cathey, Jr. (Claimant), a former -mployee of North Louisiana and Gulf Railroad Company ( lrorthLou), and MidLouisiana Rail Corporation (MidLou), a rail carrier which had acquired certain rail lines and trackage rights from NorthLou, resulting in the Claimant's loss of employment.
:'.1e Arbitrator was appointed by Cue National Mediation Hoard on April 23. 1991 pursuant to the provisions of Near York Dock.
The Claimant was represented by James D. Caldwell, Esq., of Norman R. Cordon and Associates, Shreveport, Louisiana.
Y.idl,ou eras represented by C,.ristopher E. Hagerup, Esq., of Weiner, McCaffrey, Hrodsky, Kaplan S Levin, ?.C., Washington, D.C. 7:e record in this case begins on October 7, 1987 and concludes with the submission of the last of the parties' briefs in this proceeding on July -?, 1991. Factual Bac'c^_round The .<ey events in this case took place in two related but separate proceedings before the Interstate Com.TerCe Commission in 1987. !tid South Coraoration (MidSouth), which had previously formed 'jdLou for t:ne purpose of acquiring certain trackage rights and rail lines from vorthLou and Central Louisiana and Gulf Railroad Company (Central Lou), successfully petitioned the ICC under 49 USC § 10505 for authority to continue in control of MidLou, in addition to maintaining its control of another rail carrier, MidSouth Rail Corporation (MidSouth Rail). ~rsuant to the '=visions of 49 USC § 10505(g), the employee protective conditions established in New Yor!c Dock were made applicable to this control transaction. (MidSouth Corporation - Control Exemption - HidSouth Rail Corporation and MidLouisiana Rail Corporation, Finance Doc!cet No. 31063, decided August 17, 1987). :n the second proceeding, Finance Docket No. 31077, MidLou successfully petitioned pursuant to the provisions of 49 USC § 10901 for an exemption to accuire certain rail lines and trackage rights from NorthLou and Central Lou. No employee protective provisions were, however, imposed by the ICC on this ac;uisition transaction. fMidLouisiana Rail Corneratien - Accuisition and Operation - Certain Lines of `forth Louisiana and Gulf Railroad Corroanv and Central Louisiana and Gulf Railroad Comoanv, Finance Doctet No. ?1077, decided July 16, 1987).
On August 26, 1987, _idLou offered alternative employment with another '^_usiness, or a cash severance oavment based on Length of service, to any employees of NorthLou or Central Lou ::ho ;:ere not re-hired by MidLou as it completed the approved acquisition, contingent upon the execution of a Resignation and Release form by the employee involved. Claimant :.id not agree to any of these terms, and :,as terminated from employment effective September 8, 1987.
On October 7, 1987 Claimant through his attorney wrote to MidLou and initiated ;1is quest for coverage under the employee protective provisions of stew York Lock; MidLou declined the claim.
Claimant then filed suit against MidLou in U.S. District Court on July 25, 1988, seeking New York Dock protection under the control proceeding. In a Memorandum Ruling dated December 22, 1988, the Court, citing the doctrine of primary jurisdiction, deferred the question of the Claimant's coverage to the ICC. Cathev v. MidLouisiana Rail Core., Civil Action No. 88-1932 (USDC - w.Dist.-LA. 1988).
By letter of November 15, 1989, Claimant notified MidLou of his intention to invoke the mandatory arbitration provisions of New York Dock. On February 21, 1990 MidLou sought to contest this invocation by filing a petition for clarification with the ICC and concurrently requesting a stay of arbitration pending its disposition. On July 13, 1990 the Commission determined that the matter should proceed to arbitration; it
then dismissed MidLouls petition for clarification and denied its ".)etition for a stay of arbitration. (MidSouth Corporation - Control demotion - MidSouth Rail Cormoration and MidLouisiana Rail Coraoration, Finance Docket No. 3:063, decided July 13, 1990). ?ositions of the °arties Claimant argues that his termination from employment vas a direct result of the control proceeding initiated by MidSouth in Finance Docket No. ?1063, and that the acquisition proceeding in Finance Docket No. 3107-A eras related to and concurrent with the control proceeding, not separate and distinct from it. Since employee protective provisions were applied to the control transaction, it is not logical to argue that the employees of the acquiring entity are afforded protection, tfiiereas employees of the entity being accvired are not. Claimant contends that the record demonstrates that KidLou understood and construed the action of the ICC to include the acquisition of NorthLou, and recognition of labor protection for %TorthLoou employees, including cash severance payments, despite its assertions otherwise. Accordingly, Claimant argues that.he should be determined to be a "dismissed employee" as defined by New York Dock Appendix III, Section I(c), or in the alternative, a "displaced employee" under Appendix III, Section I(b), entitling him to a cash allowance.

MidLou argues at the outset that the claim should fail because of

orocedural deficiencies: (1) the Claimant lacks standing to pursue the claim acainst Midlou since he has never been employed by MidLou; (7) the claim is time-barred because of failure to comply with the time limits of Article I, Section 11(a) of New Yor!c Doc!c; and (3) the Claimant has not met his burden of proof in establishing a claim.
As to the merits of the case, MidLou contends that the ICC and reviewi-.g `ederal courts have in similar cases consistently rejected the Claimant's line of argument that he is entitled to employee protective benefits, under the control proceeding, the acquisition proceeding, or both.
Although New York Doc!c conditions were imposed in the control proceeding, the Claimant's employer, NorthLou, eras not a party to the . proceedings, and it is well -settled that only those parties directly involved in the _roceecdncs qualify cor the =IP.loyee protective benefits which are i=osed . to the aceuisition proceeding, MidLou acquired Nort-%Lcu xursLant to ICC _oliciZs °or -cpuisitions and olx-rations under 49 USC 6 1090'., an', as is almost aliray_ the casc in Section 10901 transactions, no atrmloyee ;sotectiv= .-.rcvi:ions -rev= imooGcd.
"f_idl,ou ar^ues that a::plica.'~le precedent unanimously s=ports its substantive _:osition that t'is Claimant is not entitled to =ny la'_cr :rotactiva benefits, and his claim should therefore be denied.

Findinas anc Conclusions

Although MidLou has raised procedural questions, it would :-r_ best to ?roved directly to a disposition of tais cans on the merits. Accordingly, for the reasons discussed below, it is determined that the
Claimant is not entitled to emolvr2a zrotcctiv= ':encZits uncer % T e'_:0r'c
Doc:,, anc; tfle claim must t1^.ar__cra '~e d~niac .
In order for t=1= Claimant to succeec, he must 'De a:.)le to ce.^.E;nstrata that .:e .,^,721 _f:es for '=efits unC'.ar on°_ of t:le '-rOCeadinC;5 tiich tzo'c -lace '-x-f_-r2 the Commission.

(a) 7""° .4C=':1Cit=on ~.

Ciai_..-,ant's -ravicus r^.r~lcyer. Ncrt iq ~jnanc- D,:)c!.~t Mo. 3:077,

~.*herz MidLou c,,jcc2_-z;fujly 3ctitioned undcr
;o trac'ra~;n ri--'ats and rail lines

Section 10901 recuirzs ICC a"~q=cv`al o~_lsration of _- rail line 7)y an entit-~ that had. onlv rscejitl-i '--2--n forr~ee ',v :Ii,'Scut'a Scctic- 10901(:D) ives t'-Le Conmizzion t:,,e

!:,.as ~-qnzrallv c~oir_- 7C , 2 .1cz
ars

-:-Iicy is at 1--n-,th in

ICC E~: ?nrte

No. 392 (SUE - m o. 1), "Clacz a=t_J-n --Or t.-i3 Ac4uizition and Ops--ration

oZ -s Under 49 USC 10901", 1 7.C.C. Zcf 810 (1985), affle sub nom.
Rail Line
:11incis Ccamerce Cc=. v. ICC, 817 1,15 (D.C. Cir. 1967), '..,Ijerein
the icc aeontee final ruies s-smting from r~:.--ulation most accuizitions
and c-erations under Section 10901; --as 49 CM 1150 at sec.
7w_-, in accordance vita its zcttled _:~clicy, the Ccrmission did. not impose employee =ctective conditions on tno acc-Liziticn tr?m--acticn, and. Claimant m.,zt 1001-. else,..Thers in ----e:,:in--- coverage.

!~Lcu, ..-as a ~arty to one c T -'13 !:he acs_%,i:3i-1i.on ?roceedinr7.

Scctisn 10901 a7 a ncn-carrizr from Ncrthlou anf CentralLcu.

for the a=4isizion and is aot a rail carricr (MieLou For t'lic. :7--aciZic -'ur-)cC3) C'.15Crat1C:1 to :I^CS:'_ C=rt31n

.molcyees. 'gut tle Ccccmissien
_-=pticna! circ.;mstances
('n) ins Control ?roceedinc

3o^cause ViicLou ·.roul ,' '^cccm a carri°r subject to ICC reevlation

t.7~ 1 =1 f A 1 n4 cj
u~c.^. corr1.._ion c- ac~i-__icn oI Icrt.l~ou and Central -o u,. ..~i:~

-incj taalrcs ,2ycentroll x^another rail carrier, Mi?South Pail, it ',-came

.i=c::?s:;-r`f -cr MIeSOut.1 to se°:; !CC u;.^.7ro',31 to continue 1n control of m1CTJoL'.,

--'.9 ;.'SC § :1343(x)(°) r- 4.r=-- ,.= ICUs _:ricr azcroval xnc, authorization -or t'ta "=cqui:ition o.7 cor.~-rol c._` a carrier loy a rrson t'-at is not a carrier ',.ut t',at controls any nurtr_r of carriers°.

Section. 11353 transacticns are su.':ject to the mancatcry labor

7rot°ct10^ rF~Clar=m::'t?t: of 49 U$C § 11347. I1 tile l-lctant cases H1d$Cuth ?rccecded '_)y see!:in-- an :cem?tion under 49 USC § '0505 _rcm the final , . revis-r and > ~prcval requirert?nts o_° Section i 1343 cr.r it= c= =,r. control ..= 1Ii_'LOU an' NiCSCut'l Rail. and t!le ICC a7:-.;lied the 'Jrcvislcns ,^.T 49 USC § 10505(_) to imrose !a'-cr protectivre provisions on the tr3Rcaetion.

-!:= (_i!asticn t'rzen '-^-Comes -rtetaer the lai)or orotectiv= trovisicns

a_!ply to any 3arties other than those c'ir=ctly involved in the ,roc=_c?^yc.

'he !CC 'as taken t:1c view that labor protection is not recuired

lot employers of non-applicant carriers: i.e., only those r*1o formally ?artici-pate as parties to a transaction are covered. .'.',i= Comnicsicn's xositicn '..ias received consistent :uwnort =nom the courts.

In Lamoille Valley R.R. v. ICC, 711 F. 2d 295 (D.C. Cir. 1983), the

Court held that protection is limited to "a rail carrier involved in the transaction" and "its employees". In Missouri-Kansas-Texas R.R. v. United States, 632 F. 2c 392 (5th Cir. 1980), it Gas held that protections are for the earoloyees of the mer^ing carriers only, citing precedents beginning ·~:zth the Washington Job Protection Agreement of 1936 and its subsequent cceification as Section 11347 cc t:-.e :nterstata Cerarercs Act. See also Sc_t-ern 'acific 7ransoortation Cc. v. :CC, 736 F. 2d 708 (D.C. Cir. 1984), and Crcunse Co=. v. ICC, 781 F. 2d 1'_76 (6th Cir. :986). _., a recent cis-- directly on point, e. U.S. Court o_` Appeals laid _,. _=st any ciiou',ts about ~Zc is entitlad to ?rotections:

"Finally, avert if t'·.e :rior cases c'i~'. not definitively atcress

·:~:et^:cr under Section 11347 a non-a=olicant carrier cculr' ever :,)e su.'_`ic:cntlv "involves" in a transaction for -:'rich a,»roval is scucllt to la'mr protection 'or "af`ected" emplovees, w~ conclude that the :CC's interpretation of "involved" to m--an only those who formally 7artici^ate as oartlas to a t.=n.^-action i-- rea°sonabLCc". 3ailc.av La'-or E·;ecutivas A=cociation v. =CC, 914 F. 2d 276, 281 (D.C. Cir. 1990). Clearly, since NerthLou was not a party to the control transaction, nova c_ its =lcyees, inclutinc t'.^.o Claimant, -:ere entitled to the innefit of the la!_ror protective rrovisions crhich -.:ere irrnosed. A>,ARD :'ha claim is denied. Date: HucnTI. Duffy Areitrator I