After the enactment of the Railway Labor Act (RLA), and its 1934 amendments, Congress intervened directly in bargaining issues between Carriers and their represented employees in three main areas:
The threat of congressional intervention, itself, has been claimed to pressure the parties into resolution. This is often given a a reason for the effectiveness of PEBs in resolving disputes. In this context, there is one dramatic illustration of this propositon that was significant, documented, and illustrative of the power of threatened intervention by Congress.
The national rail strike of 1946 did not result in Post-PEB legislation, resolution was reached as President Truman spoke to Congress. The specter of nationalization of the railroads and drafting of the striking workers was being brought to a ready Congress. Trumans' handling of this national strike is captured in the following three parts:
Special legislation addressing major restructuring.
Special legislation attendant to major restructuring ranged from minor provisions requiring the establishment of a Presidential Emergency Board through legislation to resolve a dispute to the establishment of the duty to bargain, mandatory employee transfer process, arbitrations, and permanent changes to the Railway labor Act.
The Emergency Railroad Transportation Act of 1933 (ERTA) which was enacted to encourage railroads to take actions that would consolidate operations, avoid unnecessary duplication of services and facilities, and to promote financial reorganization effectively imposed a job freeze.
Civil Aeronautics Act of 1938 transferred federal responsibilities for non-military aviation from the Bureau of Air Commerce to a new, independent agency, the Civil Aeronautics Authority. The legislation also gave the authority the power to regulate airline fares and to determine the routes that air carriers would serve. Later, the Civil Aeronautics Board (CAB) created in the 1940's would use its regulatory authority to create Labor Protective Provisions (LLPs) in the early 1950's. See Development of Airline LPPs.
The Transportation Act of 1940, added mandatory labor protection for employees adversely affected by mergers in its section 5(2)(f) that was subsequently recodified as Section 11347, mandating that approval of any rail merger or consolidation or other transaction subject to Section 5(2)(f) shall require “fair and equitable arrangement to protect the interests of the railroad employees affected.”
The Rail Passenger Service Act (PL 91-518) of 1970, created the National Railroad Passenger Corporation (Amtrak). Amtrak took over the responsibilitiy for operating the inter-city passenger rail service from the private railroads, which were predominantly dedicated to freight service. Amtrak assumed ownership and control over the trackage generally known as the Northeast Corridor and other minor trackage; otherwise, it operated its trains over the freight railroad tracks. The provisions of the Act required labor protection provisions for both the employees of freight railroads and the employees of Amtrak that would be impacted by discontinuances of inter-city rail passenger service; the actual labor protection provisions became known as C-1 for freight employees and C-2 for Amtrak employees. Amtrak did directly assume the operation of certain facets of the passenger rail service but contracted with the freight railroads for the provision of all train and engine crews to operate its trains until it started to assume such operations in accordance with the Northeast Rail Service Act (NERSA) of 1981.
The Regional Rail Reorganization Act of 1973, Public Law 93-236, created Conrail, Consolidated Rail corporation formed from Penn Central and six other bankrupt companies—the Ann Arbor Railroad, Erie Lackawanna Railway , Lehigh Valley Railroad , Reading Company , Central Railroad of New Jersey and Lehigh and Hudson River Railway . Title V of this act included numerous provisions impacting the labor-management relationship, including its labor protection provisions and contracting out prohibition provision, but specifically afftected the bargaining relationship in the following sections:
- Mandatory Offers of Employment. (Section 502)
- Interim application of existing agreements. (Section 504 (a))
- The negotiation of a “New Collective-Bargaining Agreements” for each class and craft of employees.(504 (d))
While the Regional Rail Reorganization Act (RRR Act) did not specify any specific bargaining process, Conrail developed a negotiating position based on the legislative language that required the finalization of the “New Collective-Bargaining Agreement” prior to any section 6 negotiations being handled to conclusion. Conrail successfully negotiated the “New Collective-Bargaining Agreements” and, in one instance, entered into a voluntary agreement to arbitrate the “New Collective-Bargaining Agreement.”
In 1976, the Railroad Revitalization and Regulatory Reform (`4R') Act explicitly linked freight (and derivatively transit) labor protection to the level required to be paid by Amtrak. (See Rail Labor Protections)
The Airline Deregulation act of 1978, Public Law 95-504, was signed by President Carter and directly affected unions, employees, and the whole airline industry:
- Employee Protection Program (EPP) required air carriers, in hiring employees, to give preference to terminated or furloughed employees of another carrier for 10 years after enactment.
- It gradually transferred remaining regulatory authority to the U.S. Department of Transportation (DOT), and dissolved the CAB itself. Since the CAB enforced Labor Protection Provisions (LLPs), dissolving the CAB opened a policy debate about workers' rights during airline mergers in a deregulated environment. LLPs were effectively eliminated.
- It aslo contained a minor provision, Section 44, a two sentence section requiring the President to establish a Presidential Emergency Board, pursuant to Section 10 of the Railway Labor Act, to investigate and report on the dispute between Wier Air Alaska, Inc., and the Air Line Pilots Association.
The Staggers Act of 1980 affected the both the Labor Protection for Consolidated Rail Corporation (Conrail) under the Regional Rail Reorganization Act of 1973 and the ICC labor protections.
Northeast Rail Service Act of 1981 (NERSA), Public Law 97-35, Title XI, Subtitle E-Conrail, substantially impacted labor-management bargaining.
- Part 3 - Protection for Conrail Employees
- Section 1144 repealed the labor protection provisions of Title V of the RRR Act, that had already been substantially reduced by the 1980 Staggers Act.
- Section 1143 (a) amended the RRR Act to include:
- Section 701 that provided less employee protection, and
- Section 702 that created a termination program providing for a voluntary and then involuntary separation of certain excess train (brakemen) and engine (firemen) service positions.
- Section 708 provided for both a RLA arbitration process to conclude the previously RRR Act, Section 504 (d) "New Collective-Bargaining Agreements" in the event they had not been concluded, and a moratorium on RLA Section 6 notices for "job stabilization or other protective agreements" on Conrail.
- Section 711 provided for the specific preemption of state laws regarding the requirement of employment or payment of protective benefits to employees.
- Part 4 - Terms of Labor Assumption
Section 1145 specific provisions to the Rail Passenger Service Act (RPSA) including provisions for the Transfer of employees to the commuter operators, and for the formation of new collective bargaining agreements at the commuter operators. At the time the legislation was written and almost six months prior to the January 1, 1983, transfer date ther was not a clear identification who the commuter operators would be. Amtrak Commuter, created by NERSA, as a potential operator did not actually assume any employees as each state commuter authority opted to operate its own service through Metro North, NJT, and SEPTA, respectively.
- The new RPSA Section 508 provided for the transfer of effected employees and required Conrail, the commuter authorities, and the representatives of the various crafts or classes of employees to enter into negotiation for triparty implementing agreements. If the agreements were not reached by August 1, 1982, an arbitration procedure was used to finalize the agreements.
- The new RPSA Section 510 provided that the commuter authorites and the representatives of the various crafts and classes were required to enter into "new collective bargaining agreements." Failure to reach agreement by September 1, 1982, triggered the right of "any party to the dispute or the Governor of any state through which the service " operates may request the President to establish a emergency board and the President "shall" create such board. If no settlement was reached after its report, the board was mandated to require the parties to submit final offers. The board was to select the final offer and there were penalties attached for the party not accepting the selected offer. PEBs 196 (SEPTA), 197 (NJT), and 198 (Metro North) were products of this process. There was a strike on SEPTA.
- Part 6, Intercity Passenger Service Employees
Section 1165 provided that Conrail was to be relieved of the responsibilty to provide crews for intercity passenger service on the Northeast Corridor, and that Amtrak and Conrail would commence negotiations on an agreement to permit the employees to move from one service to the other every six months. No process for reaching agreements were provided, and there were no provisions governing the negotiation of the collective bargaining agreements to be effective on Amtrak for the employees transfered. Prior to January 1, 1983, Conrail, Amtrak and the two unions representing the train and engine service employees negotiated triparty implementing agreements, and Amtrak and the respective unions had negotiated the new collective bargaining agreements that would govern the employees transfered to Amtrak.
Section 541 of Title III, Subtitle J - Collective Bargaining Agreements of the Bankruptcy Amendments and Federal Judgeships Act of 1984, amending Title 11 of the United States Code by adding Section 1113 - Rejection of collective bargaining agreements. This section, which specifically does not apply to railroads, and its paragraph c, provides a process for the "debtor in possession, or trusttee . . ." to assume or reject a collective bargaining agreement:
"(c) The court shall approve an application for rejection of a collective bargaining agreement only if the court finds that—
- the trustee has, prior to the hearing, made a proposal that fulfills the requirements of subsection (b)(1);
- the authorized representative of the employees has refused to accept such proposal without good cause; and
- the balance of the equities clearly favors rejection of such agreement.
(b)
- Subsequent to filing a petition and prior to filing an application seeking rejection of a collective bargaining agreement, the debtor in possession or trustee (hereinafter in this section “trustee” shall include a debtor in possession), shall—
- (A) make a proposal to the authorized representative of the employees covered by such agreement, based on the most complete and reliable information available at the time of such proposal, which provides for those necessary modifications in the employees benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably; and
- (B) provide, subject to subsection (d)(3), the representative of the employees with such relevant information as is necessary to evaluate the proposal.
- During the period beginning on the date of the making of a proposal provided for in paragraph (1) and ending on the date of the hearing provided for in subsection (d)(1), the trustee shall meet, at reasonable times, with the authorized representative to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement.";
Section 1113 (e) allows a debtor to ask the court for temporary or interim relief on an emergency basis. The Company must show that the changes sought are “essential to the continuation of the debtor’s business” or needed “to avoid irreparable damage” to the Company. Unlike the bankruptcy code under Section 1113(c), the court has more latitude to determine the application of changes to a collective bargaining agreement.
"(e) If during a period when the collective bargaining agreement continues in effect, and if essential to the continuation of the debtor’s business, or in order to avoid irreparable damage to the estate, the court, after notice and a hearing, may authorize the trustee to implement interim changes in the terms, conditions, wages, benefits, or work rules provided by a collective bargaining agreement. Any hearing under this paragraph shall be scheduled in accordance with the needs of the trustee. The implementation of such interim changes shall not render the application for rejection moot."
- The debtor/trustee obligations:
- make timely proposal to authorized representatives of empolyees, based on the "most complete and reliable information available" which provides for the "necessary modifications in the employees benefits and protections that are neceaasry to permit the reorganization" and "assures that all creditors, the debtor and all affected parties are treated fairly and equitably;
- provide representatives of employees with relevant information as is necessary to evaluate the proposal;
- the duty to meet during the period after the proposal until the court hearing and , at reasonable times to confer in good faith in attempting to reach mutually satifactory modifications of such agreements.
- Scheduling:
The court shall schedule a hearing:
- Withing 14 days of the filing of the application for rejection.(d)(1)
- All interested parties may appear and be heard. (d)(1)
- Adequate notice - at least 10 days. (d)(1)
- Extension of no more than 7 days under special circumstance, unless trustee and representative agree.(d)(1)
- Legal Burden of Proof:
Court shall approve application only if court finds that
- Trustee has has made required proposal with requirements being met;(c)(1)
- The authroized representative has refused to accept the proposal without good cause; and(c)(2)
- the balance of equities clearly favors rejection of the agreement.(c)(3)
- The Ruling:
- To be made within 30 days after the date of commencemnt of the hearing. Trustee and representative of employees may agree on extensions. Failing to rule within the time specified, allows the trustee to reject or alter provisions of the collective bargaining agreement pending the ruling of the court on the application.(d)(2)
- Miscelleneous
- Court may enter protective orders were appopriate on information disclosed.(d)(3)
- Special needs provision for interim changes. (e)
Section 1114 of the Bankruptcy Code was enacted by Congress as part of the Retiree Benefits Bankruptcy Protection Act of 1988. Under Section 1114, a company seeking to reduce retiree benefits must give a written proposal to the Retiree Committee and set forth why the reductions it seeks are “necessary” if it is to emerge from bankruptcy. The company is then required to provide complete and reliable information to the Retiree Committee (and its professionals) and to engage in good faith negotiations. If no resolution can be reached, the company can then seek (via a motion) to have its highest and best offer imposed by the Court, over the objections of the retirees. In order to succeed on such a motion, the company must demonstrate that:
- it provided sufficient information to the retirees;
- that the modifications are “necessary” to permit its reorganization; and
- that all affected parties are treated fairly and equitably.
Once a company files a motion with the court, asserting that no compromise could be reached with the Retiree Committee, the Court will schedule a hearing on the motion no later than 21 days after the filing (absent an agreement by the company and the Retiree Committee). Within ninety days after such a hearing, the Court is required to decide whether the company should be granted the reductions to retiree benefits it seeks. During the entire process, however, the parties are expected to continue negotiations in an effort to reach a consensual resolution. If the Court rejects the modifications sought by the company, it will not order a lesser reduction, but rather will deny the company’s motion in its entirety. When that happens, the company may start the entire process all over again, likely seeking less reductions of retiree benefits.
ICC Termination Act of 1995 was signed by President Clinton on December 29, 1995, which became effective on January 1, 1996. ICC Termination Act of 1995, P.L. No. 104-88, sec 2, 109 Stat. 803 (1995) ("Act"). Pursuant to the Act, the Interstate Commerce Commission ("ICC") was abolished and an independent three-member Surface Transportation Board ("STB") was established within the federal Department of Transportation. Act secs 101 and 201-205; 61 Fed. Reg. 1842 (Jan. 24, 1996). The STB now performs a number of functions previously performed by the ICC,
The Amtrak Reform and Accountability Act of 1997, Section 142 - SERVICE DISCONTINUANCE, “extinguished” the previously agreed upon labor protection provisions, including C-2 protections under the RPSA and Section 141- RAILWAY LABOR ACT PROCEDURES set forth a dispute resolution process for reaching agreement that specifically devised a process including negotiations, a voluntary arbitration option, and, lastly, a fact-finding and recommendations panel; the process did exclude the application of the Presidential Emergency Board provision of the Railway Labor Act.
Section 199(a)(6) of the Workforce Investment Act, Pub. L. No. 105-220, 112 Stat. 1059 (1998) repealed Section 43 of the Airline Deregulation Act, eliminating the statutory authority for the Employee Protection Program (EPP).
Public Law 110-161, Consolidated Appropriations Act, 2008, enacted in December 2007, directs that two of the Allegheny-Mohawk labor protections must be followed when air carriers merge. The sections 3 and 13 of the Allegheny-Mohawk order (59 C.A.B. 45) shall apply to the integration of covered employees of the covered air carriers; “except that--
- if the same collective bargaining agent represents the combining crafts or classes at each of the covered air carriers, that collective bargaining agent's internal policies regarding integration, if any, will not be affected by and will supersede the requirements of this section; and
- the requirements of any collective bargaining agreement that may be applicable to the terms of integration involving covered employees of a covered air carrier shall not be affected by the requirements of this section as to the employees covered by that agreement, so long as those provisions allow for the protections afforded by sections 3 and 13 of the Allegheny-Mohawk provisions.”
