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February 24, 1984

RAYMOND J. DONOVAN, Secretary of Labor, etc.

The opinion of the court was delivered by: HOGAN

HOGAN, District Judge: --

 Under the Urban Mass Transportation Act, 49 U.S.C. § 1601, et seq. ("the Act" or "UMTA"), the Secretary of Labor ("Secretary") must determine whether the terms of collective bargaining agreements entered between Unions and their transit companies meet the labor-protective requirements of the Act before he can disburse federal funds to that transit company. In this case, *fn1" Local Division 732, an unincorporated labor organization and local division of the Amalgamated Transit Union ("ATU" or "Local 732"), AFL-CIO, with its headquarters in Atlanta, Georgia, seeks, inter alia, a declaratory judgment that the Secretary has unlawfully certified federal funds to the Metropolitan Atlanta Rapid Transit Authority ("MARTA"). The genesis of this litigation was Georgia's enactment in March, 1982 of a statute ("Act 1506") which plaintiff alleges has prohibited MARTA from continuing certain important collective bargaining rights of its employees. Plaintiff contends that in light of this state legislation the Secretary's disbursement of funds contravenes the requirements of the Act and must be enjoined. Defendants assert that the Secretary has acted lawfully since his decision to certify was within the discretion afforded him under the Act.

 This matter is now before the Court on cross-motions for summary judgment. In addition to the well-written briefs and helpful and lively oral argument, the Court has had the benefit of an amicus curiae brief submitted by the American Public Transit Association ("APTA"), of which MARTA is a member. For the following reasons, the Court now grants defendant's motion for summary judgment.


 Because it is necessary to view the parties' positions against the backdrop of almost two decades of labor-management relations in Atlanta, the Court will briefly review those relations before and after passage of UMTA and discuss how the MARTA amendments have altered subjects that had been part of those agreements. In 1965, the Georgia state legislature created a public body corporate to be known as the Metropolitan Atlanta Rapid Transit Authority as a joint instrumentality of the City of Atlanta and the Counties of Fulton, Cobb, DeKalb, Clayton and Gwinett. See MARTA Act of 1965, Ga. Laws, 1965, p. 2243 et seq., § 4 (Ex. 2 to Plaintiff's Motion for Summary Judgment ("Pl. Ex." 2)). After the MARTA Act was passed, MARTA acquired all of the common stock of the Atlanta Transit System (ATS), a privately owned company which had previously provided public transportation in Atlanta.

 In 1971, MARTA applied to the United States government for a capital improvement grant under UMTA. Pursuant to the procedure outlined in UMTA, the collective bargaining agreement entered between MARTA and its employees was submitted to the Secretary of Labor for his review. The Secretary reviews these collective bargaining agreements to ensure that they satisfy criteria set forth at 49 U.S.C. § 1609(c). *fn2" That Section provides,

It shall be a condition of any assistance under [section 1602 of this Title] that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees affected by such assistance. Such protective arrangements shall include, without being limited to, such provisions as may be necessary for (1) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise; (2) the continuation of collective bargaining rights; (3) the protection of individual employees against a worsening of their positions with respect to their employment; (4) assurance of employment to employees of acquired mass transportation systems and priority of reemployment of employees terminated or laid off; and (5) paid training or retraining programs. Such arrangements shall include provisions protecting individual employees against a worsening of their positions with respect to their employment which shall in no event provide benefits less than those established pursuant to section 5(2) of [this Title]. The contract for the granting of any such assistance shall specify the terms and conditions of the protective arrangements.

 The agreements which result from bargaining between the transit companies and transit employees and which provide for such protections are commonly referred to as Section 13(c) agreements. On August 9, 1971, MARTA and the Union entered an agreement that contained a Section 13(c) agreement. This 1971 agreement was made part of all subsequent UMTA grants to MARTA until 1977.

 The pertinent portions of the 1971 Section 13(c) agreement, upon which this litigation is centered, provided that with respect to collective bargaining in general,

MARTA agrees that it will bargain collectively with the Union or otherwise arrange for the continuation of collective bargaining, and that it will enter into agreements with the Union or arrange for such agreements to be entered into, relative to all subjects of collective bargaining which are or may be proper subjects of collective bargaining with a private employer.
In the case of any labor dispute . . . such dispute or controversy may be submitted at the written request of either party hereto to a board of arbitration as hereinafter provided . . . . The decision by majority vote of the arbitration board shall be final, binding and conclusive. . . .

 Id. at pp. 4-5.

 Pursuant to that section, the board of arbitration consisted of three representatives: one chosen by MARTA and one by the Union who in turn would jointly choose a third and neutral representative. The agreement stated that "the term 'labor dispute' . . . shall be broadly construed and shall include . . . the making and maintaining of collective bargaining agreements, [and] the terms to be included in such agreements." *fn3" Id. at p. 7.

 On February 14, 1977, MARTA entered a new § 13(c) agreement with the Union. The 1977 § 13(c) agreement was incorporated into all subsequent UMTA grants to MARTA since 1977. The 1977 Section 13(c) agreement provided essentially the same protections as were contained in the 1971 Section 13(c) agreement. (Affidavit of Earle W. Putnam ("Putnam Aff"), para. 11, attached to Plaintiff's Motion for Summary Judgment). The 1977 Section 13(c) agreement explicitly substituted mandatory binding (interest) arbitration upon impasse over the terms of new collective bargaining agreements. (Id. and P 20 to Exhibit.)

 On March 16, 1982, the Department of Labor received an UMTA application for operating assistance from MARTA (Affidavit of Hugh Reilly). On March 25, 1982, the Department of Labor referred a copy of the application to ATU and notified MARTA regarding the referral. (Reilly Aff., para. 5.) By letter dated March 30, 1982 and received approximately one month later, ATU International President John Rowland stated that ATU would not object if the Department of Labor certified the 1982 application of MARTA on the basis of the terms and conditions stated in the February 14, 1977 Section 13(c) agreement. (Reilly Aff. para. 6.) On April 9, 1982, the General Assembly of the State of Georgia enrolled H.B. No. 55, the MARTA Act. That Act was approved by the Governor on April 20, 1982 as Act 1506, 1982 Ga. Laws, p. 5101, et seq., and amends the MARTA Act of 1965. The 1982 Act forbids MARTA from bargaining over five subjects: the assignment of employees, discharge and termination of employees for cause, subcontracting of work, fringe benefits for part-time employees, and assignment and calculation of overtime and forbids MARTA from submitting disputes respecting those five subjects to binding arbitration. (Pl. Ex. 7, p. 5-7.) Lastly, with respect to wages, the 1982 Act provides that there be binding arbitration only upon the consent of both parties. (Id. at p. 5.)

 On or about April 20, 1982, MARTA rejected ATU's request to use the parties' 13(c) Agreement of February 14, 1977 as a basis for a new 13(c) agreement unless all references to interest arbitration were deleted. (Reilly Aff. para. 8.) The parties subsequently reconciled their positions and reduced their agreement on June 3, 1982 to writing that was to be incorporated in the Department of Labor's certification letter of June 11, 1982. That agreement provided, in pertinent part,

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