873 F.

2d 425
131 L.R.R.M. (BNA) 2201, 111 Lab.Cas. P 11,133

The MAINE CENTRAL RAILROAD COMPANY and

Portland Terminal
Company, Plaintiffs, Appellants,
v.
BROTHERHOOD OF MAINTENANCE OF WAY
EMPLOYEES, Defendant, Appellee.
The MAINE CENTRAL RAILROAD COMPANY, et al.,
Plaintiffs, Appellants,
v.
BROTHERHOOD OF MAINTENANCE OF WAY
EMPLOYEES, Defendant, Appellee.
Nos. 87-1524, 88-1876.

United States Court of Appeals,

First Circuit.
Heard Feb. 8, 1989.
Decided April 26, 1989.

Dorothy Eugenia Langan with whom Richard T. Conway, Ralph J. Moore,

Jr., Cynthia W. Simon, Shea & Gardner, Washington, D.C., Charles S.
Einsiedler, Jr., and Atwood, Scribner, Allen, Smith & Lancaster, Portland,
Me., were on briefs, for plaintiffs, appellants.
John O. Clarke, Jr., with whom Janet K. DeCosta and Highsaw &
Mahoney, P.C., Washington, D.C., were on brief, for defendant, appellee.
Before BOWNES, Circuit Judge, COFFIN, Senior Circuit Judge, and
TORRUELLA, Circuit Judge.
COFFIN, Senior Circuit Judge.

This is an appeal by plaintiffs, Maine Central Railroad Company and Portland

Terminal Company (collectively, the Carrier), from the granting of summary

judgment to defendant, Brotherhood of Maintenance of Way Employees

(BMWE, or the Organization),1 on plaintiffs' petition to set aside an award by a
statutorily authorized Arbitration Board, 663 F.Supp. 425 and 691 F.Supp. 509.
The present issues are whether the Board exceeded the bounds of its authority
under the report and recommendations of Emergency Board 209 in (1)
requiring that lump sum payments as arrived at through national bargaining by
BMWE and certain railroads, not including the Carrier, be assumed as
obligations by the Carrier, (2) in establishing per diem rates for newly
authorized system-wide maintenance production crews, and (3) in effecting a
moratorium on additional proposals concerning the issues resolved by the
Arbitration Board.
I. Evolution of the Litigation
2

This litigation, involving as it does, an order of the President, two statutes

passed by Congress, a Congressional Advisory Board recommendation, an
Emergency Board recommendation, and an Arbitration Board's binding award,
cannot be understood properly without a tracing of its significant stages.

1. The basic dispute was framed by the serving of "section 6 notices" under
section 6 of the Railway Labor Act, 45 U.S.C. Sec. 156, by both BMWE and
the Carrier in April and September of 1984. BMWE sought changes in the
collective bargaining agreement that would give additional protection to
employees, specifically, separation allowances to those displaced by
technological and other changes. The Carrier sought changes to allow
maintenance crews to service needs on a system-wide basis, not merely within
four discrete seniority sections, such new groups to be called System
Production Maintenance Crews.

2. Mediation ensued in 1985 under the auspices of the National Mediation

Board but proved unsuccessful. BMWE declined arbitration and instead
initiated a strike on March 3, 1986. By April 10, 1986, it had begun picketing
on several railroads outside the Guilford system.

3. On May 16, 1986, the President, in Executive Order 12557, established

Emergency Board 209 to investigate and report. Before the Board reported, the
Carrier, on May 24, 1986, filed new Section 6 notices, asking for major
changes in the bargaining agreement and in the Railway Labor Act and the
Railroad Retirement Act. The changes would have eliminated all craft and class
lines as well as all restrictions on contracting out work. Faced with such
requests for "dramatic changes," as Guilford's president characterized them, the
Board sought an agreed upon extension of time to report to the President. The

Carrier refused to join the request.

6

4. On June 20, 1986, Emergency Board 209 filed its report. It declined the
sweeping review sought by the Carrier in its poststrike notice and addressed the
narrow issues leading to the strike and formation of Emergency Board 209. On
the BMWE issue of job protection, the Board recognized both the need of the
Carrier to mechanize its maintenance of way operations and the claim of
affected employees that they were given disparate treatment compared to
clerical and other employees. The Board recommended acceptance of the
Carrier's March 2 proposal of a $20,000 lump sum separation allowance for
currently active employees, as modified by a BMWE counter-proposal of
$26,000.

On the Carrier's issue of System Production Maintenance Crews, the Board

recognized the right of the Carrier to establish such crews but also deemed valid
BMWE's concern that the new crews should not perform "normal, day to day,
maintenance work" that could be efficiently handled by the employees of the
several districts. Insofar as compensation was addressed, the Carrier had simply
proposed a per diem allowance, without quantification. BMWE had proposed
"various levels of travel allowance and expenses associated with meals and
lodging." The Board recommended that the parties negotiate an agreement for
the new system-wide crews similar to those agreements in effect on Guilford's
other railroads, the Boston & Maine and the Delaware & Hudson, but with the
proviso that the per diem allowance should not be less than that being paid
"maintenance of way employees under other agreements or arrangements
throughout the Guilford System."

The Board also addressed two issues that had not been the focus of specific
proposals--one involving "changes in rates of pay and health and welfare
programs," the other, "local rules and working conditions." As for the former,
the Board observed that both BMWE and the Carrier had served notices
identical to those served on a national basis and that historically both parties
had participated in, or had agreed to be bound by, concerted national handling.
It therefore recommended that "consistent with the parties' proposals of March
2 and 3, 19862 and in view of their past practice the parties should agree to be
bound by the results of the national negotiations involving rates of pay and
health and welfare programs." Regarding changes in local work rules and
working conditions, the Board noted the exchange of views between the Carrier
and BMWE in which the Carrier indicated its preference for dealing with these
issues "on a local basis." It therefore recommended that the parties agree to
handle changes in work rules and practices noticed before Executive Order
12557 "under the orderly and peaceful procedures of the Railway Labor Act ...

without resort to self-help."

9

5. On August 21, 1986, with mediation efforts following the Emergency

Board's report failing, the Congress authorized an Advisory Board to report on
progress, if any, and to make findings and recommendations. Public Law 99385.

10

6. On September 8, 1986, the Advisory Board filed its report. This Board
concluded that the Carrier's refusal to accept Emergency Board 209's
recommendations was not, as Carrier had contended, based on financial
exigency. Being still somewhat optimistic over the "cooperative approach"
manifested by both sides, the Board recommended that the parties be given
until the end of the month to reach an agreement, with the still unsettled issues
to be submitted to binding arbitration at that time.

11

7. On September 30, 1986, PL 99-431 was enacted, decreeing that "the report
and recommendations of Presidential Emergency Board Numbered 209 shall be
binding on the parties and shall have the same effect as though arrived at by
agreement of the parties" and that "if there are unresolved implementing
issues," the parties shall enter into binding arbitration to resolve them.

12

8. Finally, on October 30, 1986, the Arbitration Board issued its award, which
the district court enforced on June 3, 1987.

II. Threshold Question

Standard of Review.
13
14

Appellee has accurately described the statutory framework of our review:

15

Section 3(B) of Public Law No. 99-431, 100 Stat. at 988, expressly provides
that if it were necessary to arbitrate, "such arbitration shall be conducted as if it
were under section 7 of ... [the Railway Labor] Act, and any award of such
arbitration shall be enforceable as if under section 9 of such Act." Thus, in
reviewing the award, the district court was required by Section 9 Third of the
Railway Labor Act, 45 U.S.C. Sec. 159 Third, to affirm the award unless
appellants satisfied one of the three specific grounds for impeachment set forth
in Section 9 Third. Only one of those grounds is relevant here, and that is:
"That the award does not conform, nor confine itself, to the stipulations of the
agreement to arbitrate...." 45 U.S.C. Sec. 159 Third(b).

16

The applicable case law is well known. Judicial review of an arbitration award
is among the narrowest known in the law. United Steelworkers v. Enterprise
Wheel & Car Corp., 363 U.S. 593, 596, 80 S.Ct. 1358, 1360, 4 L.Ed.2d 1424
(1960); Local 1445, United Food and Commercial Workers v. Stop & Shop
Companies, 776 F.2d 19, 21 (1st Cir.1985); Bettencourt v. Boston Edison Co.,
560 F.2d 1045, 1048-49 (1st Cir.1977). United Paperworkers v. Misco, 484
U.S. 29, 108 S.Ct. 364, 371, 98 L.Ed.2d 286 (1987), is our most recent beacon:

17 arbitrator may not ignore the plain language of the contract; but the parties
The
having authorized the arbitrator to give meaning to the language of the agreement, a
court should not reject an award on the ground that the arbitrator misread the
contract.
18

108 S.Ct. at 371.

19

We recognize that the arbitration in this case was not of garden variety. It was
the culmination of a most deliberate, sustained, and painful intervention on the
part of the executive and legislative branches in a dispute significantly affecting
interstate commerce. The language of Section 9 Third governing standard
arbitration disputes under the RLA comports, however, with causes of such
moment in mandating that an award is to be "construed liberally by the court,
with a view to favoring its validity, and that no award shall be set aside for
trivial irregularity or clerical error, going only to form and not to substance." 45
U.S.C. Sec. 159 Third (c).

20

We nevertheless note the significant governmental attention received by this

dispute, not to signal the need for a different standard from that applying to
arbitration following no governmental involvement, but to underscore the
importance in such a case of a reviewing court resisting any temptation to put
on blinders and scrutinize words and phrases through a kind of tunnel vision.
When a railroad labor dispute has worked its way through so many stages, the
demarcation of issues in any authorizing language cannot be fairly discerned
without considering them in the light of their background and evolvement. This
perception underlies our ultimate conclusion that appellants have taken too
refined and myopic an approach.

III. Discussion of Issues

A. Lump Sum Payments
21

In response to Emergency Board 209's Third recommendation, that, "

[c]onsistent with the parties' proposals ... and ... past practice, the parties should
agree to be bound by ... national negotiations involving rates of pay....," the
Arbitration Board found that "lump sum payments" were covered by the
Emergency Board's report and that "rates of pay" could not be restricted to their
formal meaning in the RLA. This conclusion was based in part on the fact that
"lump sum payments" as referred to under "Article I--Wages" of the BMWE
national settlement "served to contribute to the basis for the agreed upon rates
of pay therein."
22

The Carrier points out, however, that "lump sum payments," although under
"Wages" in the national agreement, is distinguished from "rates of pay." It
argues, therefore, that because the Emergency Board's Third Recommendation
mentioned only "rates of pay" and not lump sum or retroactive payments, it
cannot be interpreted to cover the latter type of payment.

23

The Carrier recognizes but discounts, however, BMWE's argument that both
parties discussed lump sum payments before the Emergency Board. Indeed,
after passage of PL 99-431, the Carrier in an October 6, 1986 proposal to
BMWE included a provision for lump sum payments under the general caption,
"wages." While the actions of the parties cannot determine the scope of
arbitration, they take on significance when we take note of the careful reference
in the Emergency Board's Third Recommendation to the "proposals" of the
parties on March 2 and 3, 1986. These, as we have recorded in footnote 2, were
framed in terms of "wages" and included back pay allowances. In short, given
the reference to the parties' proposals, the Emergency Board was arguably
using "rates of pay" loosely to include other items relevant to "wages" such as
retroactive lump sum payments. We need not say that this interpretation of the
Emergency Board's language is the only possible one, or even the preferred
one. But we have no doubt that the Arbitration Board's determination that "rates
of pay" should not be narrowly confined to its formal statutory meaning is a
viable, permissible interpretation. Such a judgment has to be the end of our
inquiry. United Paperworkers v. Misco, 108 S.Ct. 364.

24

B. Per Diem Allowance for System Production Maintenance Crews

25

Here, too, the Carrier's argument falls short of demonstrating that the
Arbitration Board's interpretation of the Emergency Board report was
impermissible. The report had two relevant provisions. One was that there
should be a comprehensive agreement governing System Production
Maintenance Crews similar to those agreements on the Boston & Maine and
Delaware & Hudson. The other said that the per diem allowance for these new
system crews should not be less than that currently paid to maintenance of way

employees throughout the Guilford System.

26

The Carrier argues that this "not less than" language had as its object only
system production maintenance crews, and not "maintenance of way
employees" in general. In the Carrier's view, therefore, both provisions taken
together dictate that the allowance for the new system crews must be similar
only to those paid other system crews. This is an interpretation of the
Emergency Board's prescription but not the only reasonable one. We find it just
as reasonable to assume that the Emergency Board's intention was for these
new system crews to receive a per diem allowance in accord with that received
by maintenance of way employees in general, not just system crew workers.

27

Accepting this interpretation as permissible, it then of course would be logical

to assume that, in a situation where system employees receive a smaller
allowance than BMWE employees generally, the text specifically governing
per diem rates should supercede the Emergency Board's recommendation
governing system crews generally. Thus, the arrangements governing the new
system crews should be similar to those covering existing system crews,
provided that the per diem allowance not be less than that paid to maintenance
of way employees generally.

28

The per diem allowance for the only then extant System Production
Maintenance Crews, those on the Boston & Maine, provided $12.75 per day for
food and lodging and $4.50 for travel expenses for weekend trips. When the
Arbitration Board looked at the basis for these figures, it found that they were
based on non-updated 1972 figures stemming from Arbitration Award No. 298.
This Award also covered maintenance of way employees in all other roads in
the Guilford system; but the figures for employees in these entities had been
updated in successive national agreements (to June of 1984) to $21.75 per day
for meals and lodging. And the 1986 national agreement, though not
participated in by the Guilford roads, added $1.75, to reach a total allowance of
$23.50, the figure ultimately settled upon for the new system crews. By the
same token, 1972 mileage rates of 9 cents a mile having risen to 20.5 cents per
mile in 1986, the Board found $7.50 to be a reasonable weekend trip allowance.

29

We add that what has not been forthcoming from the Carrier is a common sense
justification for paying system maintenance crew employees (who must travel
throughout the system) about one half as much as employees on the four
sectional district crews. Clearly the Arbitration Board did not venture beyond
the permissible ambit of Emergency Board 209.

C. Moratorium
30

Finally, the Carrier complains that the award prohibits the serving of any notice
of proposed changes in matters covered by the award and mandates the
withdrawal of any proposals in "pending" notices relating to such matters,
whether filed before or after May 16, 1986, the date of Executive Order 12557.
The Carrier protests that the Emergency Board did not mention any such
moratorium.

31

The Emergency Board, however, noted that both the Carrier and the
Organization had served notices to change wages and work rules that were
identical to those served on a national basis. It also, as we have indicated,
recognized the Carrier's "willingness to provide for peaceful disposition of all
other rules and working conditions on a local basis." The Emergency Board
therefore issued its Recommendations 3 and 4:

32

3. Consistent with the parties' proposals of March 2 and 3, 1986, and in view of
their past practice, the parties should agree to be bound by the results of the
national negotiations involving rates of pay and health and welfare programs.

33

4. The parties should agree to handle changes in work rules and practices
contained in notices which had been served prior to Executive Order 12557
under the orderly and peaceful procedures of the Railway Labor Act, as
amended, up to and including mediation, and without resort to self-help.

34

The Arbitration Board's reasoning for imposing a moratorium was as follows:

35

Emergency Board 209 was convinced that all issues which related to changes in
rates of pay and health and welfare programs should, as they had in the past, be
reserved for resolution on the basis of the results of national handling. True, the
moratorium issue itself was not specifically addressed in EB 209's four (4)
recommendations. It appears clear that EB 209 had envisioned a reasonable and
realistic resolution of all outstanding disputes between the parties on a basis of
its recommendations and the result of national handling which, generally
includes a moratorium. There was simply no need to address that matter
directly as it was not in dispute. Nevertheless, the seasoned, knowledgeable,
and qualified public members of Presidential Emergency Board 209 were well
aware that the moratoriums had been part of national settlements for many,
many years.

36

The absence of a moratorium provision would render moot the terms of

recommendation No. 4 relative to the resolution of work rule issues under the
peaceful procedures of the Railway Labor Act. In addition, such an application
of the Board's Report would indicate an intent to not put all outstanding
disputes to rest.
37

Apart from the intrinsic sense of this reasoning, we have been unable to discern
how the Carrier is meaningfully disadvantaged by the moratorium provisions.
As for filing new notices of desired changes, the April 1, 1988, deadline is long
past and the Carrier is free to file at any time. The Carrier concedes this point
but claims prejudice in being forced to withdraw "[c]ertain proposals in [the]
May 24 notices, including some concerning work rules and practices, [that]
come within the scope of the broad moratorium provision in the arbitration
award." We are not told what these proposals call for. We are referred only to
the covering letter of May 24, 1986, from the Carrier to BMWE which states, "
[W]e have taken the liberty of drafting an entirely new agreement rather than
attempting to describe and catalogue changes to existing agreements." In light
of the obvious fact that the Carrier's May 24 notice was seeking a major change
in the ground rules of the industry, we are unwilling to assume on the basis of
what has been presented to us that any specific withdrawals mandated by the
Arbitration Award have any significant effect on the Carrier.

38

Moreover, we also note that the Carrier has transferred its operations to the
Springfield Terminal Railway Company under leases that it has so far
successfully claimed are exempt from regulation by the Interstate Commerce
Commission. BMWE is contesting this. It is obvious that the final disposition
of this issue is in the more distant future. The mere assertion by the Carrier that
the task required by the moratorium of refiling any of the May 24 proposals
may take some time carries little weight under these circumstances. Indeed,
when we realize that the Carrier would have us declare the entire award
nugatory because of its wholly speculative and attenuated argument on this
issue, we appreciate the wisdom of Section 9 Third: "[N]o award shall be set
aside for trivial irregularity ..., going only to form and not to substance." 45
U.S.C. Sec. 159 Third (c).

39

Affirmed.

40

TORRUELLA, Circuit Judge (concurring).

41

Although I concur in the outcome of this case I am not as certain as my brethren

that the standards of judicial review for contractual arbitration, ante at 428, are
necessarily the same as those prevalent in the case of legislatively-imposed

substantive arbitration, such as in the present appeal. Because of my

concurrence in this case's outcome, I find it unnecessary at this time to define
the precise boundaries of what I perceive to be very different kinds of
arbitrations thus requiring different standards of judicial review. I venture to
advance, however, that absent other factors, in my view the standard of judicial
review of legislatively-mandated arbitration is more akin to that involving
statutory interpretation and is thus broader in scope than run-of-the-mill
contractual arbitration wherein the parties have agreed to the private, nonappealable finality of the award. However, I shall leave this debate to a more
appropriate occasion.

Portland Terminal Company, at all times relevant to this appeal, was a wholly
owned subsidiary of Maine Central, which in turn was a wholly owned
subsidiary of Guilford Transportation Industries, Inc. (Guilford). Guilford also
owned two other railroads, the Boston and Maine Corporation and the
Delaware and Hudson Railway Company. BMWE was the labor organization
representing the craft and class of the Carrier's maintenance of way employees

These proposals were a handwritten notation added on March 3 by the Carrier

as a ninth item to its March 2 list: "[Wages & Health and Welfare on the basis
of national handling & effective upon ratification.]"; and a reported submission
by BMWE that, although it had included no specific item for back pay
allowances, "a notation was made on the Carrier proposal to show that the total
question of wages, including the issue of back pay allowances would be subject
to the outcome of national negotiations."