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Maher v. New Jersey Transit Rail Operations Inc.

Decided: August 1, 1991.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 239 N.J. Super. 213 (1990).

For affirmance in part, reversal in part -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, Garibaldi and Stein. For reversal -- Justice O'Hern. The opinion of the Court was delivered by Clifford, J. O'Hern, J., concurring and dissenting.


[125 NJ Page 459] This appeal presents questions of federal preemption, under provisions of the Railway Labor Act, 45 U.S.C.A. §§ 151 to 188, and the Federal Railroad Safety Act, 45 U.S.C.A. §§ 421 to 444, of state-law-based claims involving employees' rights.

Plaintiff, Edward Maher, dismissed from his employment with defendant New Jersey Transit Rail Operations, Inc. (NJT), filed suit against the employer alleging violations of the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -42 (LAD), and the New Jersey Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (Whistleblower Act or CEPA). His complaint also named his union, charging it with a breach of its duty of fair representation. The trial court dismissed the complaint on defendants' motions for summary judgment, ruling that all of plaintiff's claims were preempted by the Railway Labor Act. The Appellate Division affirmed so much of that ruling as dismissed the LAD and fair-representation claims, but reinstated plaintiff's claim under the Whistleblower Act. See 239 N.J. Super. 213, 570 A.2d 1289 (1990).

We granted plaintiff's petition for certification and NJT's cross-petition. See 122 N.J. 182, 584 A.2d 243 (1990). We now affirm the Appellate Division judgment restoring plaintiff's CEPA claim and holding the LAD claim preempted, but reverse so much of its judgment as determines that plaintiff's claim against the union is preempted by the Railway Labor Act.


Plaintiff began working as a signalman for NJT on January 1, 1983, the date it took over certain of the commuter-rail operations of Conrail, for whom plaintiff had worked since 1976. Maher was a member of defendant Brotherhood of Railroad Signalmen (BRS), the exclusive representative under a collective-bargaining agreement for NJT employees who work in plaintiff's field.

In 1984 Maher was diagnosed as being legally blind in his right eye as a result of a pellet-gun accident that had occurred in 1969. Although the injury caused the loss of central vision in that eye, plaintiff's peripheral vision was unaffected. Shortly after the diagnosis Maher's supervisor, William French, attempted to require Maher to wear safety glasses pursuant to

NJT's Maintenance of Way Department Safety Rule 15, which directs that "[a]n employee blind or practically blind in the eye must wear protective glasses at all times while on company property." Maher complained, however, that the glasses' side shields prevented him from seeing out of his right eye at all. Following recommendations from Maher's personal physician and an NJT doctor, NJT agreed, at first, to exempt Maher from Rule 15's application.

Maher and French apparently did not enjoy an amicable relationship. For several days in June 1984 Maher retained a private investigator to monitor French's working-hour activities. The investigator reported that French had authorized unearned overtime pay for friends, had drunk and played golf while on duty, had arranged for certain of those in his charge to work on his home while being paid by NJT, and had otherwise abused his position. Maher had the investigator submit his report to NJT's police department, which conducted its own inquiry. As a result of evidence gleaned from its own investigation and from Maher's report, NJT dismissed French.

Maher took a leave of absence from his job from March 1985 until March 1986, claiming that he needed the time off to recover from stress related to harassment at NJT over his sight handicap. Three months after his return, while Maher was on the job, his eyes were exposed to weed-poison spray, resulting in chemical conjunctivitis, which caused plaintiff to leave work for several weeks. He returned in July 1986, with a note from his doctor requesting light duty because of continuing sensitivity in his eyes. NJT did not offer that duty, however, and plaintiff did not resume work at that time.

That September Maher sought to return to his job as a signalman but was informed that he would be required to wear safety glasses at all times in accordance with Rule 15. Because plaintiff refused to work under that condition, NJT did not permit him to resume his former position. Pursuant to the collective-bargaining agreement, plaintiff filed a grievance in

January 1987, claiming that NJT had refused unjustifiably to allow him to return to work.

Maher stayed out of work while BRS negotiated his grievance with NJT. The union, however, neglected to include plaintiff in the discussions or to determine whether he found the proposed solutions acceptable. Plaintiff rejected an initial settlement that had been achieved by the employer and the union that would have resulted in Maher's transfer to a "cable gang," so BRS and the carrier resumed negotiations. A second agreement between the union and NJT was struck in September 1987; it called for Maher to receive no back pay for the year that spanned the railway's refusal to allow him to return to work as a signalman because of his unwillingness to wear glasses and the date of the settlement, and for Maher to be transferred to a midnight-shift clerical position and to wear protective goggles at that desk job. The settlement, made pursuant to a provision of the collective-bargaining agreement that governed the transfer of disabled employees, included a proviso that plaintiff report back to work within ten days of notification of its terms.

Maher rejected that settlement as well, asserting that he was ill-suited for the proposed job because of lack of training and that safety goggles at a desk job were superfluous. Despite Maher's request that NJT resolve the matter directly with his personal attorney, the employer refused to do so, asserting that the union was plaintiff's duly-authorized representative. When Maher persisted in his refusal, without "proper justification," to report to work at the position designated in the settlement agreement, NJT, pursuant to the collective-bargaining agreement, conducted a dismissal hearing. Plaintiff represented himself at the hearing, although the union was present. In spite of Maher's testimony that he had never been consulted about the settlement, that he was unsuited for the new job, and that by previous agreement he was exempted from Rule 15, NJT dismissed him for insubordination in December 1987.

Plaintiff filed his complaint in the Law Division one month later. In the meantime, and over plaintiff's objection, the union unsuccessfully pursued an appeal of Maher's dismissal with NJT. The union then obtained an arbitration hearing before the Special Board of Adjustment (Adjustment Board), an informal, quasi-judicial forum established by the Railway Labor Act to hear grievances not settled by union/carrier conference. See 45 U.S.C.A. § 153 Second. The Adjustment Board found that NJT and the union had negotiated in good faith to seek a solution by which Maher could comply with Rule 15 and continue his employment. It then found that Maher's termination for insubordination had been warranted because he had not returned to work under the terms of the settlement agreement and that the dismissal hearing had included no procedural irregularities or due-process defects that would have affected Maher's right to a fair hearing. The Adjustment Board concluded that Maher could not unilaterally disqualify himself from the clerical assignment, that his refusal to report for the position constituted an inappropriate job action, and that NJT had been justified in dismissing him.

The Law Division granted summary judgment for defendants on all counts of the complaint, ruling that plaintiff's three claims were preempted by the Railway Labor Act. As indicated, the Appellate Division affirmed the dismissal of the LAD and fair-representation claims and reversed on the Whistleblower Act claim.


We begin with a brief outline of the elementary premises supporting the preemption doctrine. Under our federal system of government the States possess sovereignty concurrent with that of the federal government, subject only to the limitations imposed by the supremacy clause of the United States Constitution, article VI, clause 2. Tafflin v. Levitt, 493 U.S. 455, , 110 S. Ct. 792, 795, 107 L. Ed. 2d 887, 894 (1990). That clause

provides that laws made in pursuance of federal constitutional authority become the "supreme law of the land." Although a State has the power, inherent in any sovereign, to determine what shall be an offense against its authority, "state laws that 'interfere with, or are contrary to the laws of Congress, made in pursuance of the constitution' are invalid." Wisconsin Pub. Intervenor v. Mortier, U.S. , , 111 S. Ct. 2476, 2478, 115 L. Ed. 2d 532 (1991) (quoting Gibbons v. Ogden, 22 U.S. 1, 71, 6 L. Ed. 23, 73 (9 Wheat.) (1824)). "The constitutional principles of pre-emption, in whatever particular field of law they operate, are designed with a common end in view: to avoid conflicting regulation of conduct by various official bodies [that] might have some authority over the subject matter." Amalgamated Ass'n of Street, Elec. Ry. & Motor Coach Employees v. Lockridge, 403 U.S. 274, 285-86, 91 S. Ct. 1909, 1917-18, 29 L. Ed. 2d 473, 482 (1971).

Whether a state law establishing a cause of action is preempted in a given case is a question of congressional intent. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 208, 105 S. Ct. 1904, 1909, 85 L. Ed. 2d 206 (1985). That intent may be obvious when it is expressly set forth by Congress in the terms of its statute. See Dewey v. R.J. Reynolds Tobacco Co., 121 N.J. 69, 77, 577 A.2d 1239 (1990). In the absence of explicit statutory language, congressional intent to supersede state law in a given area is implicit if the scheme of federal regulation is

"so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," if "the Act of Congress * * * touch[es] a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject," or if the goals "sought to be obtained" and the "obligations imposed" reveal a purpose to preclude state authority. [ Mortier, supra, U.S. at , 111 S. Ct. at 2478 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 1152, 91 L. Ed. 1447, 1459 (1947)).]

Finally, even in the absence of express language or implied congressional intent to occupy the field, a court must find state law to be preempted "to the extent that it actually conflicts with federal law." Brown v. Hotel Employees Int'l

Union, 468 U.S. 491, 510, 104 S. Ct. 3179, 3190, 82 L. Ed. 2d 373, 383 (1984). Such conflict is found when "compliance with both federal and state regulations is a physical impossibility," Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S. Ct. 1210, 1217-18, 10 L. Ed. 2d 248, 257 (1963), or if the local law impedes the accomplishment of the full purposes and objectives of Congress acting pursuant to its constitutional powers. Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 316, 101 S. Ct. 1124, 1129, 67 L. Ed. 2d 258, 265 (1981). The relative importance to the State of its own law is not material when that law conflicts with a valid federal statute. Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S. Ct. 3014, 3022, 73 L. Ed. 2d 664, 675 (1982).

The doctrine of preemption in labor law concerns the extent to which Congress has limited the permissible scope of state regulation of activity touching on labor/management relations. New York Tel. Co. v. New York State Dep't of Labor, 440 U.S. 519, 527, 99 S. Ct. 1328, 1334, 59 L. Ed. 2d 553, 561 (1979). Although congressional preemptive power in the field of labor relations is well established, see National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893 (1937), the federal legislative body "has never exercised authority to occupy the entire field in the area of labor legislation." Lueck, supra, 471 U.S. at 208, 105 S. Ct. at 1909, 85 L. Ed. 2d at 213. The Supreme Court has indicated that it "'cannot declare pre-empted all local regulation that touches or concerns in any way the complex interrelationships between employees, employers, and unions; obviously, much of this is left to the States.'" Id. at 208 n. 4, 105 S. Ct. at 1909 n. 4, 85 L. Ed. 2d at 213 n. 4 (quoting Lockridge, supra, 403 U.S. at 289, 91 S. Ct. at 1919, 29 L. Ed. 2d at 484). Thus, the question of whether a state statute addressing labor and management relations is preempted by federal considerations is one of congressional intent; "'[t]he purpose of Congress is the ultimate touchstone.'" Id. at 208, 105 S. Ct. at 1909, 85

L. Ed. 2d at 213 (quoting Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S. Ct. 1185, 1190, 55 L. Ed. 2d 443, 450 (1978)).

Preemption of state law affecting the railroad industry is governed by the Railway Labor Act. That statute, "and the concepts that are a part of it, 'cannot be appreciated apart from the environment out of which it came and the purposes which it was designed to serve.'" Southeastern Pa. Transp. Auth. v. Brotherhood of Ry. Signalmen, 882 F.2d 778, 782 (3d Cir.1989) (quoting Elgin, J. & E. Ry. v. Burley, 325 U.S. 711, 751, 65 S. Ct. 1282, 1303, 89 L. Ed. 1886, 1909 (1945) (Frankfurter, J., dissenting)), cert. denied, U.S. , 110 S. Ct. 840, 107 L. Ed. 2d 835 (1990).

When war broke out in Europe in 1914, the demand in this country for munitions and other supplies depleted the pool of available labor and increased greatly the volume of railroad freight traffic. Railroad labor, finding itself in a strong bargaining position, sought substantial concessions from the nation's railroad managers. When the railroads rebuffed those demands, the four major unions voted overwhelmingly for a nationwide strike. See generally J. Stover, The Life and Decline of the American Railroad 118-21, 159 (1970). In order to ensure efficient, uninterrupted rail service during this country's involvement in the war, the federal government temporarily nationalized the industry in 1917. The government gave full recognition to the unions, which resulted in rapid growth in worker membership. See Garrison, The National Railroad Adjustment Board: A Unique Administrative Agency, 46 Yale L.J. 567, 570 (1937). Government-and-union cooperation produced nationwide rules establishing seniority rights, reasonable working hours, security from arbitrary discharge, and a more equitable pay scale. Ibid. Recognizing that the railway industry is a "state within a state," with its own customs and vocabulary, the government instituted bi-partisan adjustment boards to apply and interpret those rules when disputes arose. Those boards enjoyed a remarkable record of resolving disputes. Ibid.

Although the federal government considered retaining control of the railroads after the war's conclusion, it returned the industry to private hands in 1920. Despite an atmosphere charged with labor unrest, management successfully acted to curb war-time employment and wage peaks, and many of the gains achieved by the unions were lost within a few years. The competent war-time adjustment boards were replaced with another form of review panel notable chiefly for its ineffectiveness, and the concept of a board with nation-wide reach eventually lost support from both labor and management. Id. at 571-73.

When Congress adopted the initial version of the Railway Labor Act in 1926, it concentrated on affirming the equal authority of carrier and union in negotiating a collective-bargaining agreement. The 1926 Act provided a localized dispute-review system that left the parties free at all times to go to court to resolve even the smallest disputes over the terms of those agreements. See Burley, supra, 325 U.S. at 725-26, 65 S. Ct. at 1290-91, 89 L. Ed. at 1896. The parties' extravagant resort to the courtroom that followed the 1926 Act resulted in constant deadlock that crippled the system. Individual grievances accumulated unresolved until their sheer volume took on the proportions of a major dispute. Id. at 726, 65 S. Ct. at 1291, 89 L. Ed. at 1896. When a national crisis appeared imminent, with several unions taking strike ballots, Congress strove to break the impasse with its 1934 amendments to the Act.

Recognizing that the mounting unrest had been fostered by the inability of the optional-jurisdiction boards to resolve small-scale differences conclusively, Congress sought to ensure stability by "providing effective and efficient remedies for the resolution of railroad-employee disputes arising out of the interpretation of collective-bargaining agreements." Union Pac. R.R. v. Sheehan, 439 U.S. 89, 94, 99 S. Ct. 399, 402, 58 L. Ed. 2d 354, 359 (1978). Prominent among the changes was the creation of a compulsory and binding arbitral system made up of a National Railroad Adjustment Board, see 45 U.S.C.A. § 153

First, and adjustment boards established for a system, group, or region, or by a carrier and its unions, see id. § 153 Second. Under that scheme "disputes * * * growing out of grievances" are to be resolved in the first instance by the parties. Id. § 153 First (i). If that effort is unsuccessful, the Railway Labor Act provides that the dispute be referred to an Adjustment Board (as we shall refer to any Railway Labor Act adjustment board) for resolution. See ibid.; id. § 153 Second. Decisions of an Adjustment Board are final and binding. See id. § 153 First (m).

The Adjustment Boards are charged with securing the "prompt, orderly and final settlement of grievances that arise daily between employees and carriers regarding rates of pay, rules and working conditions." Sheehan, supra, 439 U.S. at 94, 99 S. Ct. at 402, 58 L. Ed. 2d at 359. Although not so labelled by the Act, such disputes have been termed "minor" by the United States Supreme Court. See Burley, supra, 325 U.S. at 723, 65 S. Ct. at 1289, 89 L. Ed. at 1894. ("Major" disputes, on the other hand, relate to differences "over the formation of collective agreements or efforts to secure them"; they "present the large issues about which strikes ordinarily arise with the consequent interruptions of traffic the [Railway Labor] Act sought to avoid." Id. at 723-24, 65 S. Ct. at 1289-90, 89 L. Ed. at 1894-95.) In order to ensure the effectiveness of the revised Railway Labor Act, Congress considered it "essential" that minor disputes be kept within the jurisdiction of the Adjustment Boards "and out of the courts." Sheehan, supra, 439 U.S. at 94, 99 S. Ct. at 402, 58 L. Ed. 2d at 359. Although the Act provides that appeals from decisions of the Adjustment Boards may be taken in the federal courts, 45 U.S.C.A. § 153 First (q), that review has been characterized as "among the narrowest known to the law." Id. at 91, 99 S. Ct. at 401, 58 L. Ed. 2d at 357.

Even so, the courts have recognized four exceptions to the general rule that carriers, unions, and employees are limited to the forum of the ...

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