RAILROADS - REORGANIZATION - VALIDITY OF CONDITIONING APPROVAL OF A CONSOLIDATION BY REFERENCE TO PROPER TREATMENT OF EMPLOYEES

Authors

Kenneth J. Nordstrom, University of Michigan Law SchoolFollow

Abstract

A railroad made application to the Interstate Commerce Commission to obtain authorization to lease the lines of another railroad. The relevant federal statute provided that the commission should authorize consolidations and leases subject to such terms and conditions as it should find just and reasonable and as would promote the public interest. Accordingly, the commission conditioned approval of the lease by requiring that employees dismissed as a result of the lease be paid monthly allowances for fixed periods, or until securing re-employment; that those not dismissed be protected against any decrease in wages for five years, and reimbursed for expenses of moving necessitated by the lease. Evidence was introduced to show that the cost of the employee protection plan would amount to about one-half of the savings to be obtained by the railroad during the period of labor adjustment. Held, that under the existing statute authorizing the commission to impose conditions that will promote the "public interest," the commission had authority to impose conditions regarding the interest of affected employees. Also this construction of the statute was ruled constitutional as within the scope of congressional power to regulate interstate commerce, and as not a denial of due process. United States v. Lowden, 308 U.S. 225, 60 S. Ct. 248 (1939).

Recommended Citation

Kenneth J. Nordstrom, RAILROADS - REORGANIZATION - VALIDITY OF CONDITIONING APPROVAL OF A CONSOLIDATION BY REFERENCE TO PROPER TREATMENT OF EMPLOYEES, 39 Mich. L. Rev. 337 (1940).
Available at: https://repository.law.umich.edu/mlr/vol39/iss2/23