{"id":4534,"date":"2026-04-21T12:11:23","date_gmt":"2026-04-21T16:11:23","guid":{"rendered":"https:\/\/law.temple.edu\/10q\/?post_type=student-scholarship&p=4534"},"modified":"2026-04-23T10:00:54","modified_gmt":"2026-04-23T14:00:54","slug":"lost-solidarity-lost-profits-the-consequences-of-the-railway-labor-acts-craft-or-class-language-for-the-penn-central-merger","status":"publish","type":"student-scholarship","link":"https:\/\/law.temple.edu\/10q\/student-scholarship\/lost-solidarity-lost-profits-the-consequences-of-the-railway-labor-acts-craft-or-class-language-for-the-penn-central-merger\/","title":{"rendered":"Lost Solidarity, Lost Profits: The Consequences of the Railway Labor Act\u2019s \u201cCraft or Class\u201d Language for the Penn Central Merger"},"content":{"rendered":"\n
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Abstract<\/h2>\n\n\n\n

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\u2019s demise was exacerbated by labor fragmentation caused by the RLA\u2019s language for bargaining-unit composition, and a failure of United States labor policy to require stakeholders to internalize industry-wide market trends.<\/p>\n\n\n\n

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