RAILROAD SHOPCRAFT DISPUTE

MONDAY, MAY 15, 1967

U.S. SENATE,

SUBCOMMITTEE ON LABOR OF THE

COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to recess, in room 4232, New Senate Office Building, Senator Ralph Yarborough (chairman of the subcommittee) presiding.

Present: Senators Yarborough, Morse, Randolph, Pell, Fannin, and Griffin.

Committee staff members present: Stewart E. McClure, chief clerk; Robert O. Harris, counsel to the Labor Subcommittee; Gene Godley, professional staff member; Eugene Mittelman, minority counsel; and Peter Benedict, minority labor counsel.

Senator YARBOROUGH. Gentleman, the subcommittee will come to order.

This is a continuation of the hearings on Senate Joint Resolution 81, an act to provide for the settlement of labor disputes between certain carriers by railroad and certain of their employees.

The first witness this morning is Mr. Schoene, general counsel of the Railway Labor Executives Association. Mr. Schoene.

STATEMENT OF LESTER P. SCHOENE, GENERAL COUNSEL, RAILWAY LABOR EXECUTIVES ASSOCIATION; ACCOMPANIED BY MICHAEL MARSH, DIRECTOR OF RESEARCH

Mr. SCHOENE. Mr. Chairman and members of the committee, my name is Lester P. Schoene. I am a lawyer with offices at 1625 K Street Northwest, Washington, D.C., a member of the firm of Schoene & Kramer.

We have represented the Railway Labor Executives Association and constituent organizations on a variety of matters for a period well in excess of 20 years.

I am appearing, as the chairman announced, as counsel for the Railway Labor Executives Association, which is the same organization whose chairman, Mr. Leighty, appeared here on Friday.

I am accompanied, as Mr. Leighty was, by Mr. Michael Marsh, the director of research of the Railway Labor Executives Association.

I had hoped that Mr. Leighty also would be able to accompany me but he is out of the city and unable to get back on account of weather conditions.

However, Mr. Leighty did desire to present a very brief supplement to his statement on Friday. He has asked me to read it for him. Copies have been distributed, I understand, to members of the committee. The statement is as follows:

I should like to comment on some of the remarks of Mr. J. E. Wolfe, on behalf of the railroads, at your hearing last Friday. Mr. Wolfe stated that the railroads are not able to lock out their employees because of the requirements of the Interstate Commerce Act. He evidently meant that duty that the Act imposes on the railroads to provide service, where possible, to all shippers and passengers at rates regulated by the Interstate Commerce Commission.

A bit later in his testimony, however, Mr. Wolfe rejected most emphatically any duty by the railroads to haul the essential freight needed for our men in Vietnam and for the public health, in event of a strike.

In other words, when the unions offer to pass men through their picket lines to haul the freight needed for our war in Vietnam, Mr. Wolfe says in effect, We are going to lock out those men.

When a Senator asks what the railroads would do if the government ordered them to haul these essential shipments, Mr. Wolfe replies in effect, We would sue the government for damages.

Back in 1959, the railroads and the unions agreed with the Pentagon that proposed Minuteman missile trains would be kept moving in event of a railroad strike.

In 1967, with the nation at war, Mr. Wolfe refuses to consider a proposal to keep moving the supplies needed by our men in Vietnam, in the event of a railroad strike.

Which comes first with America's railroads today-the needs of our men in Vietnam and the public health, or their own political goal of totally outlawing their employees' right to strike?

We hope the railroad spokesmen will display a different attitude at our meeting in the Pentagon tomorrow.

That concludes Mr. Leighty's supplemental statement.

I would like to address myself this morning to a number of matters, some of which have been discussed in some detail, and I hope to be able to add a little to those matters, and others which have been only touched upon and not discussed in any detail.

Falling into the former category is the question of whether we have before us in Senate Joint Resolution 81 a proposal for compulsory arbitration. You have heard the Secretary of Labor say to you that it is essentially not a compulsory arbitration proposal. You have heard Senator Morse make the distinctions which he has placed on the record between what this bill proposes to do and his conception of compulsory arbitration.

Now as I understand the distinction between this bill and compulsory arbitration, which Secretary Wirtz makes, it is that it builds upon what the parties have accomplished through collective bargaining. He uses a figure of speech of an "arch." he says the parties in their collective bargaining have essentially built the arch and it remains only to fit in the keystone of the arch.

Yet I point out that that was exactly the situation with respect to Public Law 88-108 passed in 1963, and which the Secretary of Labor now admits was compulsory arbitration.

I will discuss Public Law 88-108 in somewhat more detail later on in my testimony. But I further point out that the mere fact that arbitration takes up where collective bargaining has left off or where collective bargaining has reached an impasse is not a distinguishing factor with respect to arbitration or nonarbitration.

It is quite customary in an arbitration agreement to define the issues to be arbitrated very narrowly and if collective bargaining has preceded, as it very frequently has, it is customary to define the issue to be arbitrated as only that remaining after a structure has been built through collective bargaining.

Senator MORSE. You are speaking about a voluntary arbitration agreement?

Mr. SCHOENE. Yes, I am, but strictly arbitration.

Now I have participated in a good many arbitrations

Senator MORSE. May I respectfully say arbitration, as far as this member of the committee is concerned, is not a clearly defined phrase. There are two types of arbitration, voluntary arbitration and compulsory arbitration. You are talking about voluntary arbitration agreement. Parties to voluntary arbitration agreements can write their own terms of reference.

Mr. SCHOENE. I understand that.

Senator MORSE. I just want the record to indicate that.

Mr. SCHOENE. I have participated in a good many arbitrations, some of them formal arbitrations under the provisions of the Railway Labor Act, some more informal.

I would say that in the majority of cases in which I have participated only a narrow issue remained to be arbitrated after collective bargaining had proceeded almost to a resolution of the controversy. So whether it is voluntary or compulsory the mere fact that there is a narrow definition of the issue does not distinguish this proposal from arbitration.

Now Senator Morse made some more sophisticated distinctions than the Secretary did and I must say that the Secretary properly associated himself with the distinctions that Senator Morse proposed.

Under Senator Morse's definitions, arbitration is a strictly judicial proceeding. Rules of evidence apply, particularly rules concerning the burden of proof, the arbitrator has no function to mediate or to seek compromises.

Consequently, in view of the fact that the major function of the board to be appointed pursuant to this joint resolution is mediation, therefore, this is not an arbitration that is proposed.

Now, Senator Morse obviously has a world of experience with arbitration. He is an expert in the field equalled by no one I know, and certainly I cannot deny to you, Senator Morse, the right to formulate your definition and to say that any conduct outside arbitration as so defined is not arbitration, whether it is compulsory or voluntary.

As I have said, I have had some experience with arbitration myself. In fact, I have had some experience serving as a member of an arbitration board.

In this respect, Senator Morse, I have a record which I don't believe that even you can match. That is a record for 100 percent unanimity in the award. I have never participated in an award that was not unanimous.

It is true that that record is based on only one case and I established it some years ago but I am still very proud of it.

Senator MORSE. You quit while you were winning.

Mr. SCHOENE. I suspect that my clients were proud of it too, because they seemed not to want to run any risk of impairing that record. At

least, I can't think of any other reason why I have not been asked to serve on an arbitration board since.

But in practice, many arbitrators do seek to mediate the dispute and to compromise it; particularly is that true when it is a tripartite board and the arbitrator has access in executive session to the party representatives on the arbitration board.

In fact, I have known arbitrators to engage in what I call shopping for concurrence.

The arbitrator will say to the representative of the one party, "This far I will go. If you don't agree with me, I will have to rewrite my decision to see if I can get the concurrence of the other side."

That is not only mediation, it is bringing pressure to bear on the parties to settle their dispute or to concur in an arbitration award. In fact, judicial conduct at the trial court level, particularly since the development of pretrial conference procedure, is also not to be so sharply differentiated.

It is true that trial judges in my experience have been very careful how they conduct a pretrial conference but they certainly do explore the possibility of settlement in advance of trial and of compromises and then, of course, if they are forced to try the case and cannot get the pretrial settlement they will try it in a strictly judicial manner, Now it is obvious that in this proposal, Senate Joint Resolution 81, the primary emphasis on the conduct of the five-man board that is to be appointed is upon mediation and with an effort to secure a voluntary settlement.

Nevertheless, as a final resort, undeniably and admittedly, it contains the power on the part of persons other than the parties, themselves, to determine in a binding fashion what the rates of pay are going to be. That is the element of compulsory arbitration which has traditionally made compulsory arbitration unacceptable to labor and which in my judgment is thoroughly ill advised in this case.

Its consequences, if that stage is reached, are to require workers who are unwilling to do so, to work at rates of pay not acceptable to them and to do so for the private profit of the railroads. That element is indistinguishable from compulsory arbitration and is the primary element in labor's constant opposition to compulsory arbitration.

Furthermore, its use in railroad labor disputes has an adverse effect on collective bargaining. In this very case the railroads are pressing from compulsory arbitration. They have said to you that they think compulsory arbitration is the only solution. This offers to them no incentive to settle during the 90-day period that this proposal allows. The worst that can happen to them if the terminal point is reached is that they will get just what they want here, compulsory arbitration. So that holding out this prospect of their getting exactly what they want through legislation is not an inducement to make the conciliatory features or the mediatory features of this act work.

Furthermore, if viewed in terms of collective bargaining in this industry in general this tends to break down the bargaining. The only time that Congress has ever imposed on railroad employees the obligation to arbitrate compulsorily was in Public Law 88-108, enacted in 1963. Undoubtedly, although that was supposed to be a one-shot deal to take care of the immediate emergency, that precedent has en

couraged the railroads to believe that if they can precipitate a national crisis, Congress will again intervene through compulsory arbitration. If that expectation is satisfied in this instance, then another nail is driven into the coffin of collective bargaining in the railroad industry. Now I am not speaking hypothetically. I know what I am talking about and I will give you an example that is highly pertinent. After the award made by the Compulsory Arbitration Board under Public Law 88-108 had expired the Brotherhood of Railroad Trainmen sought to negotiate rules that would become effective after that award expired concerning the consist of traincrews on an individual railroad basis. They were in part guided by the fact that the Presidential Railroad Commission and the Compulsory Arbitration Board itself, Board No. 282, had said that traincrew consist issues did not lend themselves well to national handling, there was so much diversity on the individual railroads to crew consist requirements that it ought to be handled on an individual railroad basis.

Consequently, the Brotherhood of Railroad Trainmen in seeking to negotiate new rules attempted to dispose of them on an individual basis and avoid national handling. If an impasse arose on any particular railroad, they wanted to be free to exercise the right to strike on that individual railroad without precipitating a national crisis.

The railroads, however, refused to bargain on that basis and took the position that national handling was required as a matter of law. The district court agreed with them and by injunction has so far prevented the bargaining on an individual railroad basis.

At this very moment my partner, Milton Kramer, is over in the court of appeals arguing an appeal from that decision of the district court. But so far, the railroads have been successful in forcing the Brotherhood of Railroad Trainmen to handle this issue on a national basis so that if it should come to an impasse they will be right back here knocking at your door and saying, "We have a national crisis," manufactured purely by the refusal of the railroads to bargain on an individual basis.

Now I have just one more thing to say on this subject and then I am through.

The Secretary of Labor has said that really this dispute about what you call something is irrelevant. The question is, Does the proposal make sense? Basically, I am inclined to agree with him. I do not think there is any point in arguing

Senator MORSE. I am sorry. I had to talk to counsel about some other matter. Will you repeat the last two or three sentences?

Mr. SCHOENE. Yes; I was saying, Senator Morse, that the Secretary of Labor has said to you and to the House committee that there is no point in arguing about the names to be applied to this proposal.

The question essentially is: Does it make sense regardless of what it is called? I was saying that basically I agree with this. But I do want to recall for the record how we happen to be arguing with the labels. In advance of sending his message to the Congress, the President of the United States, held a press conference and stated that one of the possible bills under consideration was a proposal for legislation that would be neither compulsory arbitration nor seizure.