Steele v. Louisville & Nashville Railway Co.: Labor Precedent Based in Prejudice?

Photo by Jake Weirick on Unsplash

Austin J. Wishart, Associate Member, University of Cincinnati Law Review

I. Introduction

In 2018, the Supreme Court set a new precedent in public sector labor law when it decided Janus v. AFSCME.[1] Overturning the Court’s prior decision in Abood v. Detroit Board of Education, the Court in Janus relied on both First Amendment jurisprudence and longstanding precedent surrounding labor law developed under the National Labor Relations Act (“NLRA”)[2] and Railroad Labor Act (“RLA”).[3] While many of the early cases considering these statutes established the canon of labor law as it exists today, early cases turned on the stark de jure racial divides that existed in the New Deal era.[4] These cases have left confusion in labor law jurisprudence, with racially motivated decisions creating the bedrock for pro-labor policy, racially progressive decisions creating precedent hostile to labor organizations, and everything in between. This article will examine one of the early labor law cases as an example of a potentially problematic precedent that impacts modern labor law.

II. Background

Passed in 1926, the RLA governs the labor relations of railroad employees and employers.[5] Soon after the RLA was passed, employees, employers, and labor organizations disagreed on ambiguous aspects of the Act. One of these disagreements culminated in the Supreme Court’s 1944 decision in Steele v. Louisville & Nashville Railway Co.[6] The Court was tasked with deciding whether the RLA imposes on a labor organization (the exclusive bargaining representative of a group of railway employees) the duty to represent all the employees in the field regardless of race.[7] The Court also questioned whether courts have the power to protect minority racial groups when their interests are not protected by a labor organization obligated to do so. [8]

Steele featured a union, the Brotherhood of Locomotive Firemen & Enginemen (the “Brotherhood”), as the exclusive bargaining representative of the craft of firemen employed by the Louisville & Nashville Railway Co. (the “Railroad”).[9] The Brotherhood, an explicitly white organization, had a policy in place to exclude Black firemen from membership.[10] While a majority of the firemen employed by the railroad were white and, per the explicit policy of the Brotherhood, allowed to be members of the union, a minority of the firemen were Black and thus excluded.[11] Because the white majority had lawfully decided on the Brotherhood as the workforce’s exclusive bargaining representative, the Black minority was bound to be represented by and pay into an organization that they themselves could not join.[12]

The Brotherhood served a notice on the Railroad that it would be amending its existing collective bargaining agreement in such a manner that would exclude all Black workers from continuing employment as firemen for the Railroad.[13] Following countless examples of unfair treatment by both management and the Brotherhood, Black firemen filed suit.[14] They alleged that the Brotherhood had, in its role as the exclusive bargaining representative under the RLA, an obligation to represent all firemen at the Railroad impartially and in good faith, and that by excluding Black workers from bargaining negotiations, this duty was violated. Specifically, the plaintiffs alleged that the Brotherhood was hostile and disloyal to the Black workers, deliberately discriminated against them, sought to deprive them of their seniority rights, and sought to drive them out of employment.[15]

While the Supreme Court of Alabama held that neither the Brotherhood nor the Railroad violated any rights of the petitioners by negotiating the contracts discriminating against them, the U.S. Supreme Court was not so easily swayed.[16] Instead, the Court found that the labor organization chosen to represent the craft or class of employees is chosen, per the RLA, to represent all of its members, regardless of their affiliations.[17] The Court reasoned that, unless the Brotherhood owes some duty to represent non-union members of the craft, the Black firemen at the Railroad would be left with no means of protecting their employment interests.[18] Further, in light of the plain language of the RLA and the purposes on which the Act was passed, the Court found that Congress intended to impose upon such labor organizations the duty to exercise the power conferred upon them by the majority of workers without hostile discrimination against the minority.[19]

III. Discussion

While the validity of the Court’s decision in Steele has faced minor questioning in the circuit courts, the decision stands as valid precedent, and the principles espoused by the decision stand as bedrock principals in modern labor law.[20] This places the pro-labor and anti-discrimination legal writer between two difficult conclusions. On one hand, the Court in Steele defended the right of minority workers under the RLA to be represented when the exclusive bargaining representative elected by the majority acted discriminatorily.[21] Conversely, the Steele decision enshrined precedent of the “free rider” problem in labor law and paved the way for future decisions requiring labor unions to represent individuals who refuse to pay their fair share.[22] This is a complex issue, with a variety of proposed solutions.

The simplest solution is to do nothing. Those who advocate for a do-nothing position may argue that Steele was properly decided and the precedent it set is reasonable, considering both the language of the RLA and how labor law has developed in the decades since Steele was decided. Proponents claim that Steele properly prevented discrimination from labor unions and that the problem of “free riders” (non-dues paying employees who utilize union processes in their workplace) is of no concern or minimal concern.[23] While this approach may entice some readers, for the purposes of argument, other potential solutions must be considered before settling for the do-nothing approach.

An alternative solution is to keep Steele intact but require free riders to pay their fair share of union dues. This approach, previously permissible and widely adopted as “agency fees” under the Court’s prior decision in Abood, is considered reasonable and just by many.[24] Unfortunately for those who advocate for this position, the Court explicitly rejected it in Janus as violative of non-union members’ First Amendment rights.[25]  Unless and until the Court revisits their decision in Janus, the charging of agency fees from non-union members for representation is not a viable path to synthesize the progressive and regressive aspects of the Steele decision.

Another option is to consider Steele as improperly decided, worthy of reviewing, and worthy of potentially overturning. One could argue Steele was improperly decided in that the Court improperly concluded a facially neutral decision by the Brotherhood was discriminatorily motivated. While this author finds it difficult to believe that an explicitly white organization in Alabama during the 1940s was acting neutrally in excluding Black workers, one could argue that, because the Court’s factual determination was improper, the Steele decision should be reversed. Due to the social and political circumstances of the case, this position is unlikely to prevail.

A final option, and perhaps the most convincing, is that the Steele decision ought to be narrowly tailored to cases of racial discrimination. Instead of applying a broad mandate to all labor organizations under the RLA, the Court could have narrowly tailored its holding to cases where an exclusive bargaining representative refuses to represent members of a minority due to their race. This approach would not recognize a broad right to a remedy for breach of the statutory duty of the bargaining representative to represent and act for a minority of non-union members. It would instead recognize a narrowly tailored right of minority workers to not suffer workplace discrimination on account of their race. Individuals who wish to opt out of union representation by not paying their dues would thus be unable to claim the union selected by the majority must represent them as the exclusive bargaining representative.

If a worker is discriminated against under this final approach, it would then be their burden to prove that the representative body has discriminated against them on account of their race. This leads to an uncomfortable position where the Black workers in Steele would be forced to prove that the Brotherhood discriminated against them because of their race and not for some other, non-racial reason. This could place minority workers at a disadvantage in employment situations where their exclusive bargaining representative refuses to represent them. Disputing their representative’s decision could be costly and time consuming, leading to individuals opting to accept discriminatory treatment instead of raising issue. This too is an unacceptable conclusion to reach.

IV. Conclusion

Each of the potential solutions to the dilemma posed by Steele entail problems of their own. Currently, the Court’s decision in Steele poses a dissonance between racially progressive jurisprudence and anti-labor precedent. The do-nothing approach is unacceptable because it leaves the dissonance of Steele intact. The agency fees solution reached in Abood is unconstitutional unless the Court revisits their decision in Janus. The argument that Steele was wrongly decided on the grounds that the Brotherhood was acting racially neutrally is untenable until facts are presented to show that the organization did not discriminate against Black workers. Finally, the narrowing of Steele to apply solely to the context of racial discrimination would create a higher burden of proof for minority workers attempting to prove discrimination and could potentially disincentivize minority workers from challenging discriminatory treatment. Each of these conclusions is problematic, while the Steele decision as it stands is also problematic. Unfortunately, Steele is but one of many problematic precedents impacting modern labor law.

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[1] Janus v. AFSCME, 138 S. Ct. 2448 (2018).

[2] 29 U.S.C. §§ 151-69.

[3] 45 U.S.C. §§ 151-65.

[4] Richard Rothstein, The Color of Law 155-158 (2017).

[5] 45 U.S.C. §§ 151.

[6] Steele v. Louisville & Nashville Railway Co., 323 U.S. 192 (1944).

[7] Id. at 193.

[8] Id.

[9] Id. at 194.

[10] Id.

[11] Id.

[12] Id. at 195.

[13] Id.

[14] Id. at 196.

[15] Id. at 196-197.

[16] Id. at 198.

[17] Id. at 200.

[18] Id. at 201.

[19] Id. at 203.

[20] See Thompson v. New York C. R. Co., 361 F.2d 137, 143 (2nd Cir. 1966).

[21] Steele, 323 U.S. at 181.

[22] Janus v. AFSCME, 138 S. Ct. 2448, 2468 (2018).

[23] Id. at 2457.

[24] Abood v. Detroit Bd. of Educ., 431 U.S. 209, 224 (1977).

[25] Janus, 138 S. Ct. at 2486 (“This [agency fee] procedure violates the First Amendment and cannot continue. Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”).