FINANCE DOCKET NO. 28250'

NEW YORK DOCK RAILWAY-CONTROL-BROOKLYN EASTERN DISTRICT TERMINAL

Decided February 9, 1979

The proceeding is reopened and, on further consideration, the employee protective conditions imposed in our prior decision and order in this proceeding are modified. The imposition of employee protective conditions appropriate in certain rail transactions for which approval is sought under 49 U.S.C. 11343 et seq. [formerly sections 5(2) and 5(3) of the Interstate Commerce Act] is discussed. These transactions include all rail transactions covered in those sections except trackage rights and lease situations.

Stuart H. Johnson, Jr., and Walter M. King for applicants New York Dock Railway and Brooklyn Eastern District Terminal. John S. Shannon, Donald M. Tolmie, and William G. Wooldridge for intervenor Norfolk and Western Railway Company.

John O'B. Clarke and William G. Mahoney for intervenor Railway Labor Executives' Association.

Harold A. Ross for intervenor Brotherhood of Locomotive Engineers.

DECISION OF THE COMMISSION ON FURTHER
CONSIDERATION

BY THE COMMISSION:

Pursuant to a petition for administrative review filed October 18, 1977, and supplemented May 22, 1978, by the Railway Labor Executives' Association (RLEA), we issued a decision dated July 17, 1978, finding that the entitled proceeding involves a matter of general transportation importance and reopening the proceeding for further consideration of the appropriate level of employee protection to be imposed when approval for certain rail transactions is sought under 49 U.S.C. 11343, et seq. [formerly sections 5(2) and 5(3) of the Interstate Commerce Act]."

'This decision embraces Finance Docket No. 28294, New York Dock Railway-Securities. "By decision of November 13, 1978, we extended the deadline for our final decision in this proceeding to February 12, 1979. This action was taken pursuant to 49 U.S.C. 10327(j) [formerly section 17(9)(d) of the act].

PROCEDURAL HISTORY

By initial decision dated May 13, 1977, the Administrative Law Judge recommended that control of Brooklyn Eastern District Terminal (BEDT) of New York, NY, by New York Dock Railway (Dock), also of New York, NY, be approved subject to certain conditions including ones imposed for the protection of employees. More specifically, the Administrative Law Judge imposed the "New Orleans" labor protective conditions set forth in appendix II of Southern Ry. Co.-Control-Central of Georgia Ry. Co., 317 I.C.C. 557, 588 (1962), augmented by the Appendix C-1 conditions of the National Railroad Passenger Corporation Agreement (Appendix C1) with some modifications. Exceptions were filed by the Minority Shareholders of BEDT and Phelps Dodge Products Corporation, individually, and intervenors RLEA and The Brotherhood of Railway and Airline Clerks (BRAC), jointly. Applicant Dock replied.

Inasmuch as Dock's tender offer was to expire on September 30, 1977, the Commission, Division 3, issued an emergency order on September 26, 1977, affirming the initial decision in all respects except as to the appropriate labor protection conditions to be imposed. In that decision the employee protective conditions recommended by the Administrative Law Judge were modified so as to substitute the Appendix C-1 conditions (referred to in that order as the "Amtrak Conditions"). The division noted that a subsequent report would be issued in the proceeding which would contain a detailed discussion of the issues raised on exceptions and that said report would become a part of the September 26 order by reference. Pursuant to a petition filed by RLEA, division 3 issued a supplemental order on September 29, 1977, which modified the prior order by allowing the parties to consummate the transaction authorized but prohibiting them from taking any action that would affect employee rights until the Commission could act on a petition to be filed by RLEA seeking discretionary review of the labor protective conditions imposed in the September 26 order. On October 18, 1977, RLEA filed the described petition under rule 98(e) of the Commission's General Rules of Practice, 49 CFR 1100.98(e), seeking a determination that the question of appropriate employee protective provisions involves a matter of general transportation importance and that the case should be reopened for further consideration. Dock replied on November 25, 1977,

The Commission initially promulgated the "New Orleans" conditions in New Orleans Union Passenger Terminal Case, 282 I.C.C. 271 (1952).

opposing the relief sought in the petition. In a "Notice to the Parties" dated March 2, 1978, the parties were notified that action on the above petition and reply would be held in abeyance pending the issuance of the full report of division 3 in this proceeding, upon which issuance the petition and reply could be supplemented to address more fully the issues discussed in the report. The decision of the Commission, Division 3, Acting as an Appellate Division, dated April 11, 1978, was published at 354 I.C.C. 399 (1978). In this decision the basis for the findings made in the emergency order of September 26, 1977, as supplemented by order of September 29, 1977, were detailed; however, the labor protective conditions were modified by combining a version of sections 4 and 5 of the Washington Job Protection Agreement (WJPA) with the provisions of Appendix C-1, with inapplicable references eliminated. See appendix III of New York Dock Ry.-Control-Brooklyn Eastern Dist., 354 I.C.C. 399 (1978). Certain arrangements were made for the equitable application of the conditions in this proceeding as strict adherance to the provisions of article I, section 4 were impossible because the parties had already been authorized to consummate the transaction, albeit without affecting employee rights, by the order of September 29, 1977. As authorized by the "Notice to the Parties" dated March 2, 1978, RLEA filed its supplemental petition on May 22, 1978, reiterating that the appropriate labor protective conditions to be imposed in cases of this type is a matter of general transportation importance. Dock filed its supplemental reply on May 19, 1978. By decision dated July 17, 1978, the Commission granted RLEA's petition and reopened the proceeding for further consideration of appropriate employee protective conditions."

In addition to the pleadings, as supplemented, of RLEA and Dock, several other statements have been filed in this proceeding. More specifically, in a "Notice to the Parties" in Finance Docket No. 28643 (Sub-No. 1), Norfolk and Western Railway Company-Acquire Branch Track-Detroit, Toledo, and Ironton Railroad Company, dated July 24, 1978, it was stated that the labor protective conditions finally adopted in the New York Dock proceeding would be imposed in that proceeding. Therefore, the employee organization opposing that proceeding, the Brotherhood of Locomotive Engineers (BLE), was authorized to submit its views concerning appropriate employee protective conditions here. Parties both to this proceeding and to the Norfolk and Western

'By decision of September 8, 1978. Division 3. Acting as an Appellate Division, modified its prior decision of April 11, 1978 in certain respects none of which are relevant to the issues involved here.

proceeding were authorized to respond to BLE's comments. BLE filed its comments on September 11, 1978, and Dock and BEDT, jointly, and Norfolk and Western Railway Company (NW) and RLEA, individually, responded to these comments in pleadings all filed September 26, 1978.

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PRELIMINARY MATTERS

Embraced in the respective pleadings of BLE and RLEA are requests that we reopen this proceeding and hold an evidentiary hearing to develop additional factual support assertedly necessary to enable this Commission to comply with the requirements of 49 U.S.C. 11347 [formerly section 5(2)(f) of the Interstate Commerce Act]. We note that the parties have been given ample opportunity to supplement the record in this proceeding as to appropriate employee protective conditions, and, in light of the detailed pleadings and appendixes so filed, an oral hearing would result in no substantive enhancement of the record. For this reason, and to avoid further delay in disposition of this matter, we will deny the requests.

In a decision dated August 30, 1978, the Commission denied a petition in which RLEA sought to consolidate this proceeding with AB-36 (Sub-No. 2), Oregon Short Line Railroad and the Union Pacific Railroad Company-Abandonment Portion Goshen Branch Between Firth and Ammon in Bingham and Bonneville Counties, Idaho, and Finance Docket No. 28387, Norfolk and Western Railway Company-Trackage Rights-Burlington Northern, Inc., and to reopen the records therein for the purpose of receiving additional submissions from the parties on proposed employee protective conditions.

"The Interstate Commerce Act (act) was recently revised, codified, and enacted without substantive change as subtitle IV of Title 49, United States Code, "Transportation" section 5(2)(f) of the act is now codified at 49 U.S.C. 11347 and has been revised without substantive change to read as follows:

When a rail carrier is involved in a transaction for which approval is sought under sections 11344 and 11345 or section 11346 of this title, the Interstate Commerce Commission shall require the carrier to provide a fair arrangement at least as protective of the interests of employees who are affected by the transaction as the terms imposed under this section before February 5, 1976, and the terms established under section 565 of title 45. Notwithstanding this subtitle, the arrangement may be made by the rail carrier and the authorized representative of its employees. The arrangement and the order approving the transaction must require that the employees of the affected rail carrier will not be in a worse position related to their employment as a result of the transaction during the 4 years following the effective date of the final action of the Commission (or if an employee was employed for a lesser period of time by the carrier before the action became effective, for that lesser period).

For purposes of reference, section 5(2)(f) of the act reads as follows:

As a condition of its approval, under this paragraph (2) or paragraph (3), of any transaction involving a carrier or carriers by railroad subject to the provisions of this part. the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected. In its order of approval the Commission shall include terms and conditions providing that during the period of four years from the effective date of such order such transaction will not (footnote 6 continued on next page)

THE EVIDENCE

RLEA and BLE challenge the labor protective conditions previously developed in this proceeding. These conditions were found to be appropriate for imposition in certain cases involving coordination of separate rail carrier facilities and seniority rosters and similar situations requiring Commission approval under 49 U.S.C. 11343 et seq. [formerly sections 5(2) and 5(3) of the act]. Generally, RLEA offers a two-pronged objection to the conditions. First, it asserts that the conditions are in violation of that portion of section 5(2)(f) of the act which requires that conditions be imposed that are “no less protective of the interests of employees than those heretofore imposed pursuant to this subdivision and those established pursuant to section 405 of the Rail Passenger Service Act***." See 49 U.S.C. 11347 for current language. Second, RLEA argues that by allegedly imposing the minimum level of protection without examining each provision, the Commission abused its discretion and failed to require a fair and equitable arrangement.

Specifically, as to its first charge, RLEA states that by not including the full protections of sections 4 and 5 of WJPA, which protections were previously imposed in cases of this type, the Commission failed to meet the minimum level of protection mandated by the statute. RLEA complains that though the Commission assertedly did include the protection of those sections, essential portions thereof were omitted. RLEA points to three segments in article I of the conditions previously imposed which RLEA feels cuts back on the rights afforded under sections 4 and 5 of WJPA. The first of these is the final sentence in article 1, section 4, which reads: "At the completion (of) the ninety (90) day notice period, (the) railroad may proceed with the transaction." RLEA argues that this sentence would allow consummation of a transaction

footnote 6 continued)

result in employees of the carrier or carriers by railroad affected by such order being in a worse position with respect to their employment, except that the protection afforded to any employee pursuant to this sentence shall not be required to continue for a longer period, following the effective date of such order, than the period during which such employee was in the employ of such carrier or carriers prior to the effective date of such order. Such arrangement shall contain provisions no less protective of the interests of employees than those heretofore imposed pursuant to this subdivision and those established pursuant to section 405 of the Rail Passenger Service Act (45 U.S.C. 565). Notwithstanding any other provisions of this Act, an agreement pertaining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or representatives of its or their employees.