1. Under Title III, § 307, of the Transportation Act, 1920,
the Railroad Labor Board has jurisdiction to hear and decide a
dispute over rules and working conditions upon the application of
either side when the parties have failed to agree upon a settlement
under § 301 and no adjustment board has been organized under
§ 302. P.
261 U. S.
80.
2. In authorizing such application by any "organization of
employees . . . directly interested in the dispute," (§ 307),
the act includes labor unions. P.
261 U. S.
81.
3. The Board has jurisdiction to decide who may represent
employees in conferences under § 301 or in applying for
hearings under § 307, and to make reasonable rules in advance
for ascertaining the will of the employees in this regard. §
308. P.
261 U. S.
82.
4. The Board was created not as a tribunal to determine the
legal rights and obligations of railway employers and employees or
to protect and enforce these, but to decide how such rights ought
to be exercised for cooperation in running a railroad; its
decisions have no other sanction than that of public opinion. P.
261 U. S.
84.
5. The making of decisions and publication of violations in
accordance with the procedure and within the discretion defined by
the statute cannot be enjoined by the courts.
Id.
282 F. 701 affirmed.
This case involves the construction of Title III of the
Transportation Act of 1920. c. 91, 41 Stat. 456, 469. The title
provides for the settlement of disputes between railroad companies
engaged in interstate commerce and their employees, and, as a means
of securing this, it creates a Railroad Labor Board and defines its
functions and powers.
The Pennsylvania Railroad Company began this action by a bill in
equity against the Railroad Labor Board and its individual members
in the District Court for the
Page 261 U. S. 73
Northern District of Illinois, where the Board has its office,
averring that the suit involved more than $3,000, and praying an
injunction against the defendants' alleged unlawful proceedings
under the act and especially against their threatened official
publication under § 313 of the title that the Railroad Company
had violated the Board's decision under the act.
The defendants moved to dismiss the bill on the ground that the
suit was one against the United States without its consent, and
also for want of equity and a lack of a cause of action. They also
filed an answer making the same objections to the bill as in the
motion and setting forth by exhibits more in detail the proceedings
before the Board and its decisions. The district court heard the
case on the bill, motion, and answer, and granted the injunction as
prayed. The Board appealed to the circuit court of appeals, which
reversed the decree and directed the dismissal of the bill. The
decree of the circuit court of appeals not being made final by the
statutes, the case is brought here by appeal under § 241 of
the Judicial Code.
On December 28, 1917, the President, by authority of the Act of
Congress of August 29, 1916, c. 418, 39 Stat. 619, 645, took over
the railroads of the country, including that of the complainant,
and operated them through the Director General of Railroads until
March 1, 1920, when, pursuant to the Transportation Act of 1920,
possession of them was restored to the companies owning them.
During his operation, the Director General had increased wages and
established the rules and working conditions by what were called
national agreements with national labor unions composed of men
engaged in the various railroad crafts. Further demands by
employees through such unions were presented to the Director
General and were pending and undetermined when the Transportation
Act was approved. Conferences were held between the
Page 261 U. S. 74
heads of the labor unions, signatories to the national
agreement, and representatives of the railroads after the railroads
were restored to private ownership but without successful issue.
When the members of the Labor Board were appointed and organized,
April 15, 1920, it assumed jurisdiction of these demands and
proceeded to deal with them. It rendered its decision as to the
wage dispute on July 20, 1920, and postponed that as to rules and
working conditions until April 14, 1921, when it decided that such
rules and working conditions as were fixed in the so-called
national agreements under the Director General and had been
continued by the Board as a
modus vivendi should end July
1, 1921, and remanded the matter to the individual carriers and
their respective employees, calling upon them, in the case of each
railroad, to designate representatives to confer and decide so far
as possible respecting rules and working conditions for the
operation of such railroad and to keep the Board advised of the
progress toward agreement. The Board accompanied this decision (No.
119) with a statement of principles or rules of decision which it
intended to follow in consideration and settlement of disputes
between the carriers and employees. The only two here important are
§§ 5 and 15, as follows:
"5. The right of such lawful organization to act toward lawful
objects through representatives of its own choice, whether
employees of a particular carrier or otherwise, shall be agreed to
by management."
"15. The majority of any craft or class of employees shall have
the right to determine what organization shall represent members of
such craft or class. Such organization shall have the right to make
an agreement which shall apply to all employees in such craft or
class. No such agreement shall infringe, however, upon the right of
employees not members of the organization representing the majority
to present grievances either in person or by representatives of
their own choice. "
Page 261 U. S. 75
On June 27, 1921, the Board announced that some carriers in
conference with their employees had agreed upon rules and working
conditions and others had not. As to the latter, the Board
continued the old rules and working conditions until it should
render a decision as to them.
In May, 1921, the officers of the Federal Shop Crafts of the
Pennsylvania System, a labor union of employees of that system
engaged in shop work, and affiliated with the American Federation
of Labor, met the representatives of the Pennsylvania Railroad
Company. They said they represented a majority of the employees of
the Pennsylvania System in those crafts and were prepared to confer
and agree upon rules and working conditions. The Pennsylvania
representatives refused to confer with the Federation for lack of
proof that it did represent such a majority, and said they would
send out a form of ballot to their employees asking them to
designate thereon their representatives. The Federation officers
objected to this ballot because it was not in accordance with
principles 5 and 15 of the Board, in that it made no provision for
representation of employees by an organization, but specified that
those selected must be natural persons, and such only as were
employees of the Pennsylvania Company, and also because it required
that representatives of the employees should be selected
regionally, rather than from the whole system. The result was that
the company and the Federation each sent out ballots. The
Federation then filed a complaint, under § 307 of the
Transportation Act, against the Pennsylvania Company, complaining
on behalf of its members directly interested of the company's
course in respect of the ballots. The company appeared, a hearing
was had, and the Board decided (Decision No. 218) that neither of
the ballots sent out by the parties was proper, that
representatives so chosen were not proper representatives, and that
rules and working
Page 261 U. S. 76
conditions agreed upon by them would be void. It further
appeared that the votes cast on the company's ballots were
something more than 3,000 out of more than 33,000 employees
entitled to vote. The Federation had advised its members not to
vote on the company's ballots. What the result was in the vote of
the Federation ballots did not appear. The persons chosen by the
3,000 votes on the company's ballots conferred with the
Pennsylvania Company's representatives and agreed upon rules and
working conditions. The Board in its decision ordered a new
election, for which rules were prescribed and a form of ballot was
specified, on which labor organizations as well as individuals
could be voted for as representatives at the option of the
employee.
The company, on September 16, 1921, applied to the Board to
vacate this decision on the ground that there was no dispute before
the Board of which by Title III of the Transportation Act the Board
was given jurisdiction. After a hearing, the Board declined to
vacate its order, but said that it would allow the company to be
heard on the question of the ratification of its shop craft rules
by representatives of the crafts concerned when fairly
selected.
Title III of the Transportation Act of 1920 bears the heading,
"Disputes between Carriers and Their Employees and Subordinate
Officials."
Section 301 makes it the duty of carriers, their officers,
employees, and subordinate officials to exert every reasonable
effort to avoid interruption to the operation of an interstate
commerce carrier due to a dispute between the carrier and its
employees, and further provides that such disputes shall be
considered, and if possible decided,
"in conference between representatives designated and authorized
so to confer by the carriers, or the employees or subordinate
officials thereof, directly interested in the dispute. "
Page 261 U. S. 77
The section concludes:
"If any dispute is not decided in such conference, it shall be
referred by the parties thereto to the board which under the
provisions of this title is authorized to hear and decide such
dispute."
Section 302 provides for the establishment of railroad boards of
adjustment by agreement between any carrier, group of carriers, or
the carriers as a whole, and any employees or subordinate officials
of carriers, or organization or groups of organizations thereof. No
such boards of adjustment were established when this controversy
arose.
Section 303 provides for hearing and decision by such boards of
adjustment upon petition of any dispute involving only grievances,
rules or working conditions not decided as provided in §
301.
Sections 304, 305, and 306 provide for the appointment and
organization of the "Railroad Labor Board" composed of nine
members, three from the Labor Group, three from the Carrier Group,
and three from the Public Group.
Section 307(a) provides that, when a labor adjustment board
under § 303 has not reached a decision of a dispute involving
grievances, rules or working conditions in a reasonable time, or
when the appropriate adjustment board has not been organized under
§ 302, the Railroad Labor Board,
"(1) upon the application of the chief executive of any carrier
or organization of employees or subordinate officials whose members
are directly interested in the dispute, (2) upon a written petition
signed by not less than 100 unorganized employees or subordinate
officials directly interested in the dispute, or (3) upon the Labor
Board's own motion if it is of the opinion that the dispute is
likely substantially to interrupt commerce, shall receive for
hearing, and as soon as practicable and with due diligence decide,
any dispute involving grievances, rules, or
Page 261 U. S. 78
working conditions which is not decided as provided in §
301."
Paragraph (b) of the same section provides for a hearing and
decision of disputes over wages.
Paragraph (c) makes necessary to a decision of the Board the
concurrence of five members of whom, in the case of wage disputes,
a member of the Public Group must be one. The paragraph further
provides that:
"All decisions of the Labor Board shall be entered upon the
records of the Board and copies thereof, together with such
statement of facts bearing thereon as the Board may deem proper,
shall be immediately communicated to the parties to the dispute,
the President, each Adjustment Board, and the [Interstate Commerce]
Commission, and shall be given further publicity in such manner as
the Labor Board may determine."
Paragraph (d) requires that decisions of the Board shall
establish standards of working conditions which in the opinion of
the Board are just and reasonable.
Section 308 prescribes other duties and powers of the Labor
Board, among which is that of making "regulations necessary for the
efficient execution of the functions vested in it by this
title."
Section 309 prescribes that:
"An party to any dispute to be considered by an Adjustment Board
or by the Labor Board shall be entitled to a hearing either in
person or by counsel."
Section 313 is as follows:
"The Labor Board, in case it has reason to believe that any
decision of the Labor Board or of an Adjustment Board is violated
by any carrier, or employee or subordinate official, or
organization thereof, may, upon its own motion after due notice and
hearing to all persons directly interested in such violation,
determine whether, in its opinion, such violation has occurred and
make public its decision in such manner as it may determine. "
Page 261 U. S. 79
MR. CHIEF JUSTICE TAFT, after stating the case as above,
delivered the opinion of the Court.
It is evident from a review of Title III of the Transportation
Act of 1920 that Congress deems it of the highest public interest
to prevent the interruption of interstate commerce by labor
disputes and strikes, and that its plan is to encourage settlement
without strikes, first by conference between the parties, failing
that, by reference to adjustment boards of the parties' own
choosing and, if this is ineffective, by a full hearing before a
national board appointed by the President, upon which are an equal
number of representatives of the Carrier Group, the Labor Group,
and the Public. The decisions of the Labor Board are not to be
enforced by process. The only sanction of its decision is to be the
force of public opinion invoked by the fairness of a full hearing,
the intrinsic justice of the conclusion, strengthened by the
official prestige of the Board, and the full publication of the
violation of such decision by any party to the proceeding. The
evident thought of Congress in these provisions is that the
economic interest of every member of the public in the undisturbed
flow of interstate commerce and the acute inconvenience to which
all must be subjected by an interruption caused by a serious and
widespread labor dispute fastens public attention closely on all
the circumstances
Page 261 U. S. 80
of the controversy and arouses public criticism of the side
thought to be at fault. The function of the Labor Board is to
direct that public criticism against the party who it thinks justly
deserves it.
The main and controlling question in this case is whether the
members of the Board exceeded their powers on the facts as
disclosed in the bill and answer.
It is contended by the carrier that the Labor Board cannot
obtain jurisdiction to hear and decide a dispute until it is
referred by the parties to the Board after they have conferred and
failed to agree under § 301. Undoubtedly the act requires a
serious effort by the carrier and his employees to adjust their
differences as the first step in settling a dispute, but the
subsequent sections dispel the idea that the jurisdiction of the
Board to function in respect to the dispute is dependent on a joint
submission of the dispute to it. If adjustment boards are not
agreed upon, then, under § 307, either side is given an
opportunity to bring its complaint before the Labor Board, which
then is to summon everyone having an interest, and after a full
hearing is to render a decision. A dispute existed between all the
carriers and the officers of the national labor unions as to rules
and working conditions in the operation of the railroads. By order
of the Labor Board, this dispute, which had arisen before the
passage of the Transportation Act, and before the government had
turned back the railroads to their owners, was continued for
settlement before the Labor Board. That Board had been obliged to
postpone the decision of the controversy until it could give it
full hearing, and meantime had ordered that the existing rules and
conditions should be maintained as a
modus vivendi.
Counsel of the railroad company insist that the Board had no
jurisdiction to make an order or to take up the controversies
between the government Railroad Administration and the national
labor unions; that, when the railroads
Page 261 U. S. 81
were turned back to their owners, each company had the right to
make its own rules and conditions and to deal with its own
employees under § 301, and that the jurisdiction of the Board
did not attach until a dispute as to such rules and conditions
between the company and its employees had thereafter arisen.
We are not called upon to pass upon the propriety or legality of
what the Labor Board did in continuing the existing rules and labor
conditions which had come over from the Railroad Administration, or
in hearing an argument as to their amendment by its decision. It
suffices for our decision that the Labor Board, at the instance of
the carriers, finally referred the whole question of rules and
labor conditions to each company and its employees to be settled by
conference under § 301; that such conferences were attempted
in this case, and that thereafter the matter was brought before the
Board by Federation No. 90 of Shop Crafts of the Pennsylvania
System under § 307. It is the alleged invalidity of this
proceeding, thus initiated, which is really the basis of the bill
of complaint of the company herein, and it is this only which we
need consider.
First, did Federation No. 90 have the right under § 307 to
institute the hearing of the dispute? Section 307 says that this
may be invoked on the application of the chief executive of any
organization of employees whose members are directly interested in
the dispute. Its name indicates, and the record shows, that the
Federation is an association of employees of the Pennsylvania
Company directly interested in the dispute. The only question
between the company and the Federation is whether the membership of
the latter includes a majority of the company's employees who are
interested. But it is said that the Federation is a labor union
affiliated with the American Federation of Labor, and that the
phrase "organization
Page 261 U. S. 82
of employees" used in the act was not intended by Congress to
include labor unions. We find nothing in the act to impose any such
limitation if the organization in other respects fulfills the
description of the act. Congress has frequently recognized the
legality of labor unions,
United Mine Workers v. Coronado Coal
Co., 259 U. S. 344, and
no reason suggests itself why such an association, if its
membership is properly inclusive, may not be regarded as among the
organizations of employees referred to in this legislation.
The next objection made by the company to the jurisdiction of
the Board to entertain the proceeding initiated by the Federation
is that it did not involve the kind of dispute of which the Board
could take cognizance under the act. The result of the conferences
between the Pennsylvania Railroad Company and its employees under
§ 301 appears in the statement of the case. By a vote of 3,000
out of more than 30,000 employees, a representative committee was
appointed with which the officers of the company made an agreement
as to rules and working conditions. Federation No. 90, for its
members, objected to the settlement on the ground that it had not
been made by properly chosen representatives of the employees, and
brought this dispute before the Labor Board. The Pennsylvania
Company was summoned and appeared before the Board, and the issue
was heard.
It is urged that the question who may represent the employees as
to grievances, rules, and working conditions under § 301 is
not within the jurisdiction of the Labor Board to decide; that
these representatives must be determined before the conferences are
held under that section; that the jurisdiction of the Labor Board
does not begin until after these conferences are held, and that the
representatives who can make application under § 307 to the
Board are representatives engaged in the conference under §
301. Such a construction would give either side
Page 261 U. S. 83
an easy opportunity to defeat the operation of the act and to
prevent the Labor Board from considering any dispute. It would tend
to make the act unworkable. If the Board has jurisdiction to hear
representatives of the employees, it must of necessity have the
power to determine who are proper representatives of the employees.
That is a condition precedent to its effective exercise of
jurisdiction at all. One of its specific powers conferred by §
308 is to "make regulations necessary for the efficient execution
of the functions vested in it by this title." This must include the
authority to determine who are proper representatives of the
employees and to make reasonable rules for ascertaining the will of
the employees in the matter.
Again, we think that this question of who may be representatives
of employees, not only before the Board, but in the conferences and
elsewhere, is and always has been one of the most important of the
rules and working conditions in the operation of a railroad. The
purpose of Congress to promote harmonious relations between the
managers of railways and their employees is seen in every section
of this Act, and the importance attached by Congress to conferences
between them for this purpose is equally obvious. Congress must
have intended, therefore, to include the procedure for determining
representatives of employees as a proper subject matter of dispute
to be considered by the Board under § 307. The act is to be
liberally construed to effect the manifest effort of Congress to
compose differences between railroad companies and their employees,
and it would not help this effort to exclude from the lawful
consideration of the Labor Board a question which has so often
seriously affected the relations between the companies and their
employees in the past, and is often encountered on the very
threshold of controversies between them.
The second objection is that the Labor Board in Decision 119 and
principles 5 and 15, and in Decision 218,
Page 261 U. S. 84
compels the railroad company to recognize labor unions as
factors in the conduct of its business. The counsel for the company
insist that the right to deal with individual representatives of
its employees as to rules and working conditions is an inherent
right which cannot be constitutionally taken from it. The
employees, or at least those who are members of the labor unions,
contend that they have a lawful right to select their own
representatives, and that it is not within the right of the company
to restrict them in their selection to employees of the company or
to forbid selection of officers of their labor unions qualified to
deal with, and protect their interests. This statute certainly does
not deprive either side of the rights claimed.
But Title III was not enacted to provide a tribunal to determine
what were the legal rights and obligations of railway employers and
employees or to enforce or protect them. Courts can do that. The
Labor Board was created to decide how the parties ought to exercise
their legal rights so as to enable them to cooperate in running the
railroad. It was to reach a fair compromise between the parties
without regard to the legal rights upon which each side might
insist in a court of law. The Board is to act as a board of
arbitration. It is to give expression to its view of the moral
obligation of each side as members of society to agree upon a basis
for cooperation in the work of running the railroad in the public
interest. The only limitation upon the Board's decisions is that
they should establish a standard of conditions which, in its
opinion, is just and reasonable. The jurisdiction of the Board to
direct the parties to do what it deems they should do is not to be
limited by their constitutional or legal right to refuse to do it.
Under the act, there is no constraint upon them to do what the
Board decides they should do except the moral constraint, already
mentioned, of publication of its decision.
Page 261 U. S. 85
It is not for this or any other court to pass upon the
correctness of the conclusion of the Labor Board if it keeps within
the jurisdiction thus assigned to it by the statute. The statute
does not require the railway company to recognize or to deal with
or confer with labor unions. It does not require employees to deal
with their employers through their fellow employees. But we think
it does vest the Labor Board with power to decide how such
representatives ought to be chosen with a view to securing a
satisfactory cooperation and leaves it to the two sides to accept
or reject the decision. The statute provides the machinery for
conferences, the hearings, the decisions, and the moral sanction.
The Labor Board must comply with the requirements of the statute,
but, having thus complied, it is not in its reasonings and
conclusions limited as a court is limited to a consideration of the
legal rights of the parties.
The propriety of the Board's announcing in advance of litigated
disputes the rules of decision as to them is not before us except
as to principles 5 and 15 of Decision No. 119, so far as they
determine the methods by which representatives of employees should
be selected. They were applied and followed in the form of ballot
prescribed by Decision 218. These decisions were necessary in order
that conferences should be properly begun under § 301, and
that disputes there arising should be brought before the Board.
They were therefore not premature. It is not for us to express any
opinion upon the merits of these principles and decisions. All that
we may do in this case is to hold, as we do, that they were within
the lawful function of the Board to render, and, not being
compulsory, violate no legal or equitable right of the complaining
company.
For this reason, we think that the district court was wrong in
enjoining the Labor Board from proceeding to entertain further
jurisdiction and from publishing its
Page 261 U. S. 86
opinions, and that the court of appeals was right in reversing
the district court and in directing a dismissal of the bill. We do
not find it necessary, therefore, to consider the questions raised
at the bar as to whether the Railroad Labor Board is a corporation
under the act and capable of suing or being sued, without the
consent of the United States, and whether the Board's publication
of its opinions in matters beyond its jurisdiction could be
properly enjoined by a court of equity.
Decree affirmed.
