Texas and New Orleans Railroad Company et al v. Brotherhood of Railway and Steamship Clerks et al

United States 1930

Synopsis

The growth of unionism in the railway industry has been a tempestuous affair, marked with victories and tragedies. Railroad employees have been fighting for their rights since the industry's beginning. These efforts are a reaction to the harsh and deadly work environment the workers have had to endure. Injuries and death are common, as are poor wages and long hours. As early as 1855, workers organized into labor unions to protect their labor rights. Several hundred workers were even injured and killed while striking against wage cuts. Despite opposition from employers, railway employees continued to fight for better working conditions and pay.

One major victory came on 20 May 1926 with the passing of the Railway Labor Act (RLA). The act originally was designed to ensure workers the right to unionize and engage in collective bargaining. The act further prohibited employers from discriminating against employees for being involved in union activities.

RLA was both a success and a failure. Employers remained, for the most part, opposed to unionism and found different ways to manipulate union influence in the railway industry. For example, the Texas and New Orleans Railroad Company (NOR) essentially created its own "union" and intimidated and coerced their employees into joining it. The company's control of the union and its representatives served the company's interests, not those of the employees. In turn, the employees had already nominated the Brotherhood of Railway and Steam Clerks (Brotherhood) to serve as their labor representatives. Management of the Texas and New Orleans Railroad Company refused to deal with these representatives and continued to force its employees to leave the union. An alleged violation of the Railway Labor Act prompted the Brotherhood and railway company to enter into an extensive legal battle that proceeded from the district court up to the Supreme Court. At each level, the courts found in favor of the Brotherhood. Unfortunately, the victory was, in part, a hollow one. Although RLA spelled out specific rules of behavior, enforcing them was another matter. This case did, however, inspire legislators to amend RLA so that its language and penalties were strengthened, thus increasing its effectiveness.

Timeline

• 1915: A German submarine sinks the Lusitania, killing 1,195, including 128 U.S. citizens. Theretofore, many Americans had been sympathetic toward Germany, but the incident begins to turn the tide of U.S. sentiment toward the Allies.
• 1920: League of Nations, based in Geneva, holds its first meetings.
• 1925: European leaders attempt to secure the peace at the Locarno Conference, which guarantees the boundaries between France and Germany, and Belgium and Germany.
• 1927: Charles A. Lindbergh makes the first successful solo nonstop flight across the Atlantic, and becomes an international hero.
• 1930: Naval disarmament treaty signed by the United States, Great Britain, France, Italy, and Japan.
• 1930: Collectivization of Soviet agriculture begins, and with it one of the greatest crimes of the twentieth century. In the next years, as Soviet operatives force peasants to give up their lands, millions will die either by direct action, manmade famine, or forced labor. Overseas, however, and particularly among intellectuals and artists of the West, Soviet collectivization and industrialization are regarded as models of progress for the world.
• 1930: Discovery of Pluto.
• 1933: Newly inaugurated U.S. president Franklin D. Roosevelt launches the first phase of his New Deal to put depression-era America back to work.
• 1935: Second phase of New Deal begins with the introduction of social security, farm assistance, and housing and tax reform.
• 1940: Hitler's troops sweep through western Europe, annexing Norway and Denmark in April, and in May the Low Countries and France. At the same time, Stalin—who in this year arranges the murder of Trotsky in Mexico—takes advantage of the situation to add the Baltic republics (Latvia, Lithuania, and Estonia) to the Soviet empire, where they will remain for more than half a century.
• 1945: April sees the death of three leaders: Roosevelt passes away on 12 April; the Italians execute Mussolini and his mistress on 28 April; and Hitler (along with Eva Braun, propaganda minister Josef Goebbels, and Goebbels's family) commits suicide on 30 April.

Event and Its Context

The Railway Labor Act

For much of America's history, the economy has been based on the success of the railroad industry, with its ability to ship people and commodities to all corners of the country. The industry has also witnessed some of the greatest changes in labor relations. From the earliest days, railway employees commonly faced dangerous work environments and injuries during the course of their duties. In addition, employees faced regular wage cuts and long hours. Their walkouts met stiff resistance, both from employers and the government. Railroad company management solicited assistance from federal troops, as well as local and state militia, to suppress strikes and rioting. It was not uncommon for these face-offs to result in strikers being killed or injured, such as in 1877, when over 100 employees were killed while protesting a 10 percent wage reduction.

Therefore, it is not hard to understand why unionism gained acceptance among railway workers. Under public pressure, legislators slowly began to make changes to improve labor conditions in the railroad industry. The first changes focused on safety, such as the Safety Appliance Act of 1893, the Federal Employers Liability Act of 1908, and the Accident Reports Act of 1910. Although some legislation, such as the Sherman Antitrust Act of 1890, attempted to hinder unionism's growth in the railway industry, unionism continued to progress.

On 20 May 1926 the government passed the Railway Labor Act (RLA). RLA required employers to engage in collective bargaining and prohibited them from discriminating against employees on the basis of union involvement. RLA also enforced its rulings under penalty of law. According to David Moberg in a 2001 article in the Progressive Media Project, "the [RLA] was designed to minimize transportation disruptions while recognizing the right of workers to organize and negotiate contracts. It set up a multistage procedure of mediation, 'cooling off' periods, and the establishment of presidential 'emergency boards' to investigate disputes and push settlements." The National Mediation Board could intervene to promote proper mediation.

To the common observer, the railway workers now possessed a powerful legal tool in their fight for improved labor relations. On the surface, this was true, but as the employees of the Texas and New Orleans Railroad Company would soon discover, RLA contained hidden problems.

The Brotherhood v. the Texas/New Orleans Railroad Company

Beginning in 1918, the railway clerks of the Texas and New Orleans Railroad (NOR) Company had authorized, by majority, the Brotherhood of Railway and Steamship Clerks (Brother-hood) to serve as their arbitrators in all matters of labor. The Texas and NOR Company continued to recognize the Brotherhood as the legitimate representatives for their employees, even after the union entered an application for an employee wage increase on November 1925. The railroad company denied this application. In response, the Brotherhood filed a petition with the National Mediation Board, asking the board to intervene and prompt the company to engage in wage negotiations.

In essence, the Texas and NOR Company decided not to recognize the Brotherhood after all. Even as the petition to the United States Board of Mediation came under consideration, the company created its own union of railway clerks, naming it the Association of Clerical Employees-Southern Pacific Lines. This "union" consisted of company-appointed representatives, many of whom where officers in the company and favored the company's interests more than those of the employees. In addition to the formation of its company-controlled union, the Texas and NOR Company began a campaign of intimidation and coercion. Employees found themselves being influenced to join the Association of Clerical Employees-Southern Pacific Lines, nominate the Association to act as their official labor representative, and abandon the Brotherhood. In some cases, the company offered favors and rewards to certain employees, subtly influencing the negotiations toward the corporate side. Should the employees not proceed as the company wished, it would revoke the favors. In other cases, the company used direct intimidation to attempt to force its employees to sign with the Association or face possible termination.

Citing this to be a violation of RLA, the Brotherhood took the Texas and NOR Company to court. During the proceedings, the company stated that it had acted in proper accordance with the law, as the majority of employees had authorized the Association of Clerical Employees-Southern Pacific Lines to be their designated representative. As such, the company could not recognize the Brotherhood of Railway and Steamship Clerks nor its request for a wage increase. After the final hearing, the district court found the railroad company in contempt and ordered the Texas and NOR Company to disband the Association of Clerical Employees and reinstate the Brotherhood as the proper labor representatives. This injunction then transferred to the circuit court of appeals, which found that the district court had acted appropriately in its authority and upheld the injunction.

The case did not end there. It went to the Supreme Court on 1 May 1930 (281 U.S. 548). Once more the Texas and NOR Company declared its innocence of all charges and asked for the dismissal of the injunctions that had been placed upon it. The company's attorneys argued that the company's actions were lawful and that the district court decision violated the company's First and Fifth Amendment rights under the Constitution, with freedom of speech and property issues being the key components of the controversy. Pointing to the First Amendment protection of freedom of speech, the Texas and NOR Company claimed it was within its rights to discuss union representation with its employees and that the restrictions placed on it by RLA and district court were unfair. It also questioned the district court's decision to order it to compensate terminated employees with back pay, because it claimed it had the right to terminate employees for any reason. Furthermore, it claimed that the injunction of the district court that had been placed against the company was invalid according to section 20 of the Clayton Act.

In turn, the Brotherhood's attorneys demonstrated to the Court the company's gross violations of RLA. Perhaps the most damning evidence against the Texas and NOR Company took the form of a letter from H. M. Lull, the company's executive vice president, to A. D. McDonald, the company's president. Dated 24 May 1927, after the Brotherhood's petition to the National Mediation Board, the letter detailed the possible results for the company should the wage increase issue go to arbitration. Lull referred to a similar case in which the railway clerks on lines west of El Paso were awarded a payroll increase of $340,000 per annum. Lull explained that to the best of his knowledge the Brotherhood did not represent the majority of employees. According to the United States Supreme Court, 281 U.S. 548, Lull further wrote that "it is our intention, when handling the matter in mediation proceedings, to raise the question of the right of [the Brotherhood] to represent these employees and if arbitration is proposed, we shall decline to arbitrate on the basis that the petitioner does not represent the majority of the employees." Lull anticipated that this approach would allow them to settle with employees for no more than $75,000 per annum. Obviously, the company's interests would be best served by not dealing with the Brotherhood, which, despite Lull's explanation, did represent the majority of railway clerks. Further evidence revealed that the Texas and NOR Company engaged in intimidation and coercion to promote its Association. On 26 May 1930 the Supreme Court upheld the findings of the district court and circuit court of appeals. It made a clear distinction between freedom of speech and unlawful coercion.

The Texas and NOR Company was found guilty of violating RLA, but the legislation did not provide for punishment. In other words, although the Supreme Court could say that the Texas and NOR Company was in the wrong, it could do little else but restore the status quo and require that any egregious behavior be stopped. The legislation had been designed to encourage fairness in labor negotiations, but it did not detail enforcement. Companies such as Texas and NOR were expected to conduct business according to RLA more or less out of good faith. With no legal consequences to back it up, RLA remained ineffectual. Amendments to the law were obviously required.

RLA after 281 U.S. 548

Since the landmark legal case in 1930, RLA has been enhanced by several amendments. For example, the act has been extended to cover airlines as well as railroads. In addition, amendments govern the selection of employee representatives and the arbitration, mediation, and negotiation processes. The most important change was the strengthening of the law's enforcement policy. Employers can be criminally prosecuted for RLA violations and face imprisonment (for up to six months) and fines of $20,000 per day that the employer fails to comply with obligations outlined under RLA.

Key Players

Lull, H. M.: Executive vice president of the Texas and New Orleans Railroad Company, Lull wrote a letter detailing the plan to manipulate labor negotiations to the company's advantage. This letter, which revealed the company's willing violation of RLA, became a key point during the court action that followed.

See also: Railroad Strike of 1877; Railway Labor Act.

Bibliography

Periodicals

Moberg, David. "On 75th Anniversary of Railway Labor Act, We Need to Protect Workers' Rights." The Progressive Media Project, 16 May 2001.

Other

Etters, Ronald M. The Railway Labor Act: An Outline. 2002[cited 26 September 2002]. http://www.gmu.edu/departments/law/drc/RLAOutline.htm .

Findlaw for Legal Professionals. Laws: Cases, Codes, and Regs. Texas and New Orleans Railroad v. Brotherhood of Railway and Steamship Clerks. 281 U.S. 548 (1930). 2002 [cited 26 September 2002]. http:// laws.lp.findlaw.com/getcase/us/281/548.html .

Texas and New Orleans Railroad Company et al. v.Brotherhood of Railway and Steamship Clerks et al., 281U.S. 548; 50 S. Ct. 427; 74 L. Ed. 1034 (1930).

United States Department of Justice. 2454 The Railway Labor Act (RLA)—45 U.S.C. 151, et seq. 2002 [cited 26 September 2002]. http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/crm02454.htm .

United Transportation Union. About UTU. Rail Strikes Marked Early Days as Workers Organized Unions. 2002[cited 26 September 2002]. <http://www.utu.org/worksite/history/strikes.htm>.

—Lee Ann Paradise