Van Dusen, Aldisert and Gibbons, Circuit Judges.
This case is before the court on appeal from a district court order of December 30, 1970, granting summary judgment for defendants on Counts I and II of the complaint and dismissing Count III, without prejudice, for a lack of standing to sue, after both plaintiffs and defendants had filed motions for summary judgment.
On September 26, 1961, the Interstate Commerce Commission, pursuant to 49 U.S.C. § 5(2), approved the abandonment of all but 40 miles of the track of the Lehigh and New England Railroad (Railroad) and the sale of the remaining 40 miles to the Lehigh and New England Railway (Railway).*fn1 In order to meet its statutory duty under 49 U.S.C. § 5(2)(f) to "require a fair and equitable arrangement to protect the interests of all the railroad employees affected," the ICC prescribed the labor protection conditions set out in New Orleans Union Passenger Terminal, 282 I.C.C. 271 (1952).*fn2 This appeal is from a district court order denying the claims of former employees of Railroad to allowances for furloughs and dismissals resulting from the abandonment and merger based on alleged non- compliance with the ICC protective order.
The complaint is set out in three counts and seeks a mandatory injunction to compel arbitration of the disputes.*fn3
Plaintiffs in Count I seek compulsory arbitration of their claims for displacement and severance benefits under the ICC protective order. The district court opinion of December 30, 1970, granting summary judgment on Count I, held that plaintiffs in Count I consisted of the workers of Railroad who were furloughed prior to the effective date of the consolidation. These furloughs allegedly occurred as the result of a plan to divert the traffic of Railroad in order to give the impression that Railroad was losing business as a result of general economic conditions, rather than as a result of the impending consolidation. On this appeal, plaintiffs have maintained that the closing date for determining membership in Count I is the effective date of the merger. They contend that Count I includes all those employees who were on the payroll of Railroad at the time of the merger and received less than the full benefits mandated by the ICC protective order.*fn4 An analysis of the record which was before the district court at the time it ruled on the summary judgment motions indicates that the closing date for determining membership in Count I was January 1959,*fn5 and that the composition of Count I was narrowed to include only those employees on the January 1959 payroll who were furloughed prior to the effective date of the merger. Plaintiffs' sole theory of relief for Count I is that employees were furloughed in anticipation of and prior to the consolidation.*fn6 In the district court order of December 30, 1970, leave was granted to amend the complaint within 30 days to clarify the class of plaintiffs in Count I. Plaintiffs failed to file a timely amendment to the complaint.*fn7
The district court found that as a matter of law all of plaintiffs' claims in Count I were barred by the statute of limitations and the doctrine of laches in view of the six-year limitation period established by Pennsylvania law.*fn8 The alleged wrongs in this Count, the furloughing of employees in anticipation of the consolidation, all must have occurred prior to the effective date of the consolidation, November 1, 1961. The instant action was not filed until November 4, 1968, and is thus barred by the six-year limitation period.
Plaintiffs argue that the rights of the affected workers are vested rights of a continuous nature and thus not barred by the statute of limitations. The analysis of the four-year protective period as creating a vested right to compensation which continues until such period terminates is rejected. It is clear from the face of the statute that the congressional mandate is to provide a four-year job protection period and not to create a vested right to compensation.*fn9 The protective order issued by the ICC as a condition of the merger imposed a duty on the Railroad to insure that employees would not be adversely affected by the merger and provided a scale of compensation for violations of that duty. There is no vested right to compensation as plaintiffs allege, but rather a right to protection from changes in employment status resulting from the merger.
The time of the accrual of the cause of action*fn10 is a federal question to be determined by reference to federal law.*fn11 The cause of action in the instant case accrued on the alleged date that the duty was breached, which was the date of the furloughs.*fn12
Plaintiffs in Count II are 22 former employees of Railroad who retired at the time of the consolidation. In October of 1961 the president of Railway notified his employees of the pending consolidation and offered to pay lump sum severance benefits to any man over the age of 65 who would voluntarily retire. The 22 plaintiffs in this Count signed retirement agreements and, later, releases. Both of these documents stated that the employees waived all rights under the ICC order of September 26, 1961. The district court, in granting defendants' motion for summary judgment, held that by signing these documents plaintiffs had waived any rights to compensation under the ICC order and that their claims were barred by the statute of limitations.
Plaintiffs' claim is barred by the applicable Pennsylvania six-year statute of limitations, 12 P.S. § 31. The cause of action for compensation under the ICC order accrued upon severance in 1961 and this action was not filed until 1968. Plaintiffs assert that the statute of limitations should not have begun to run in 1961 because they had no knowledge of their rights under the ICC order. The releases and notices of retirement were entered in the record and are cognizable on a motion for summary judgment.*fn13 The record does not show the invalidity of these documents and does not establish a lack of knowledge by plaintiffs' class of rights under the ICC order. The validity of these documents as evidencing a knowing and ...