Abstract
The failure of the Penn Central merger was significantly impacted by fragmented labor relations, rigid collective-bargaining agreements (CBAs), and an inefficient proliferation of bargaining units. This article contends that two types of constraints on bargaining units could have mitigated these challenges: the unit ceilings imposed in the hospital industry in the 1980s and sectoral bargaining as practiced in Europe. The primary obstacle to these constraints was the statute governing labor-management relations in the railroad sector, the Railway Labor Act (RLA). Imposing these constraints would have fostered labor solidarity while enabling management to better adapt to major disruptions that befell the rail industry.
This article proceeds as follows. Part A describes the basic structure of the RLA, with a focus on its unit-determination procedure. Part B contrasts that procedure with that of the National Labor Relations Act (NLRA), the statute governing labor-management relations for most of the private sector in the United States. Part C explains the state of railroad collective bargaining in the mid-twentieth century and the prevalence of featherbedding in the form of rigid work rules found in legislation and CBAs. Part D provides some history of the Penn Central merger and the subsequent bankruptcy from a labor-relations perspective. Part E describes how Congress and the National Labor Relations Board (NLRB), the agency that enforces the NLRA, successfully handled the problem of unit proliferation in acute-care hospitals. Part F illustrates how the National Mediation Board (NMB), the agency that administers the RLA, invoked its authority to more sensibly define bargaining units in the airline industry. Part G outlines how the sectoral bargaining model practiced in demonstrates the benefits of bargaining-unit consolidation for purposes of national-level macroeconomic planning and coordination. Finally, Parts H, I, and J analyze the lessons learned from the preceding sections. Hence, I conclude that the Penn Central’s demise was exacerbated by labor fragmentation caused by the RLA’s language for bargaining-unit composition, and a failure of United States labor policy to require stakeholders to internalize industry-wide market trends.
About Josh Rosenberg
Labor-Management Relations Examiner, National Labor Relations Board, Region 4 (Philadelphia). Rosenberg Daneri earned a Juris Doctor from Temple University Beasley School of Law, where he was a Research Editor for the Temple Law Review. Previously, he earned a Master of Industrial & Labor Relations from Cornell University and a Bachelor of Arts from New College of Florida. The views expressed in this article are solely his own and do not represent the views of the National Labor Relations Board, its General Counsel, or the United States Government.