Due to their importance in interstate commerce and their economic impact on an expanding nation, it was recognized very early that railroads needed regulation in the public interest. In the 1860’s railroad employees formed the Big Four Brotherhoods. By 1180 these employees engaged in a series of prolonged strikes. Congress acted through the Arbitration Act of 1888. It provided for voluntary arbitration and investigative boards in a strike situation. After a series of attempts at legislation which were of limited effect, Congress enacted the Railway Labor Act of 1926. There were other amendments through 1966.

Coverage of the FLA extends to all railroads in interstate commerce. These includes express companies, Pullmans, bridges, lighters, ferries, terminal facilities; and refrigeration, storage and delivery services. It does not cover trucking. It does not apply to urban, street or suburban light rail, unless these are part of general railroad system. The Interstate Commerce commission (ICC) has the power to decide which systems come under the Act. The sale, consolidation, or merger of railroad property requires ICC approval. In a merger situation, the merged railroad can be excused from its obligations under a collective bargaining agreement with a showing of necessity. See Norfolk & Western Railroad v. American Train Dispatchers, 111 S. Ct. 1156 (1991).

The National Mediation Board (NMB) is the most important agency created under the RLA. It is composed of three members appointed by the president. Their term is three years. The powers of the NMB are as follows:
• Determine questions of representation
• Mediating between the carrier and labor organization during negotiations for a new agreement. The NMB has no power to dictate any terms.
• Administrative support for the National Railway Adjustment Board as well as Public Law Boards. A panel of neutral referees is maintained.
• Arbitration under Section 5. If mediation is unsuccessful, arbitration is proposed. If arbitration is rejected, the Board may under Section 10 of the RLA advise the president of the United States. The President then has the power to issue an executive order creating a Presidential Emergency Board (PEB) to investigate and file a report. The PEB ten holds hearings and makes recommendations to the president within 30 days. The disputants must maintain a status quo until this report is submitted and for 30 days afterward.