TO: ALL MEMBERS BROTHERHOOD OF LOCOMOTIVE ENGINEERS
SP(WL) (INCLUDING THE FORMER EP&SW)
RE: PROPOSED AGREEMENT MODIFYING THE CURRENT AGREEMENT
Attached find copy of the proposed modified Southern Pacific Western Lines (including the former EP&SW) agreement. This agreement is forwarded to you for your review and vote on whether or not to ratify the agreement as modified. To aid you in being able to make an intelligent decision on your voting regarding this agreement, this letter will provide some information for your consideration. For those of you who are not interested in the history and current law pertaining to New York Dock protection please skim this document; however; pay close attention starting at page 13 through page 20 .
A question, likely, that all will ask is: why do we have to change our current agreement and how can the railroad circumvent the Railway Labor Act, as amended? In that regard, I provide the following:
Current federal law that governs post merger implementing agreements (Intersate Commerce Act as executed via New York Dock) and recent interpretations made by the courts (including the Supreme Court and the Circuit Court of Appeals), as well as the contemporary rulings of the Interstate Commerce Commission and the Surface Transportation Board serve, to support the railroad's position that they can select an existing agreement that will prevail in the merged (Hubs) locations.
It is essential that we first understand New York Dock (the current law) and what it provides including legal precedent. The entire matter begins with the Emergency Railroad Transportation Act of 1933 and concludes with the New York Dock Railway case, U.S. Court of appeals New York Dock Railway vs. I.C.C., November 7, 1979, (360 I.C.C.) 60; AFF'D 609 F.2d 83). For those interested in the historical background on the various consolidation of railroad operations, please refer to this case especially pages 86-90.
The following gives a short summary of the provisions of New York Dock Railway vs. I.C.C.:
New York dock is the name of a labor protective arrangement that offers up to six years of wages and benefits to unionized railroad employees who are adversely affected by a transaction approved by the Surface Transportation Board (formerly the Interstate Commerce Commission).
Transactions covered by New York dock include mergers, acquisitions, and line sales to Class I carriers.
What Does 'ADVERSELY AFFECTED' Mean?
You are adversely affected when you are placed in a worse position due to an STB approved transaction. There must be a direct connection between the transaction and the adverse effect.
"DISMISSED EMPLOYEE' or 'DISPLACED EMPLOYEE"?
Being a DISMISSED employee means that you:
a) Have been deprived of employment because of the transaction-,
b) Have been furloughed as a direct result of the transaction;
c) Have been bumped, and subsequently furloughed, by another affected employee;
d) Cannot hold a position through the full exercise of seniority.
Being a DISPLACED employee means that you:
e) Have been placed in a worse position as it relates to compensation and work rules because of the transaction;
f) Have been required, due to the transaction, to exercise your seniority to a lower-rated position.
CALCULATING POTENTIAL NEW YORK DOCK BENEFITS
New York Dock provides up to six years of protection, not to exceed years of service. The allowance for a dismissed employee is based on the earned compensation for the 12 full months preceding the date deprived of employment due to the transaction. This calculation would not include time off for injury or absenteeism. This dismissal allowance would be subsequently adjusted for any general wage increases.
The allowance for a displaced employee would be the difference in earnings in the 12 month period preceding the date displaced by the transaction. As in the dismissal allowance, the calculation is based on earned compensation, so time off for injury or absenteeism would not be included. This displacement allowance is also subject to adjustment for any general wage increases.
It should be noted that a dismissed employee has the option of collecting a separation allowance in lieu of all other benefits. This separation allowance is equal to 360 days pay, and the employee must elect to resign from the company within seven days of being dismissed in order to collect the allowance.
What Are Employees Required to Do Under New York Dock?
To COLLECT NEW YORK DOCK BENEFITS, YOU MUST:
g) Follow your work (including relocation, if necessary);
h) Exercise seniority to the fullest;
i) Accept comparable employment not requiring a change in residence, including in a different craft;
j) Be available for overtime,
k) Exercise seniority to a higher-rated position if there is a vacancy.
ARBITRATION
In addition, section 4 of the conditions provide, in pertinent part:
Each transaction which may result in a dismissal or displacement of employees or rearrangement of forces, shall provide for the selection of forces from all employees involved on a basis accepted as appropriate for application in the particular case and any assignment of employees made necessary by the transaction shall be made on the basis of an agreement or decision under this section 4. If at the end of thirty (30) days there is a failure to agree, either party to the dispute may submit it [to arbitration].
The departure from an easily administrable rule to a flexible standard will create a great deal of emphasis on the arbitration process. (Because of the unpredictable state of the law, it seems that employers and employees will arbitrate virtually every displacement allowance claim.) Moreover, because of the deference accorded arbitrators by the ICC and the deference accorded the ICC by the D.C. Circuit, arbitrators are likely to draw the boundaries of the New York dock conditions. The law will thus develop on an ad hoc, factually intense bases and will likely remain uncertain for the foreseeable future.
Jonathan, Gottlieb, George
Washington Law Review
June-August, 1996
Once permission is granted by the Surface Transportation Board (STB), formerly the ICC, to allow two (2) railroads to merge and impose New York Dock (NYD) conditions then the railroad must serve a notice under NYD to combine the two (2) railroads in a specific location pursuant to Section 4 NYD. This requires the parties to negotiate an implementing agreement. This implementing agreement is the contract that stipulates the wages, rules, working conditions, seniority rights, and seniority configuration for the newly merged territory. It comes about either (1) through voluntary agreement by labor and management, or (2) via forced imposition by a New York Dock arbitrator.
Once the notice is served, and negotiations have commenced, if the parties have not reached a voluntary agreement within 30 days, either side (i.e., labor or management) may force the issue to arbitration. At that point, an arbitrator will make a binding ruling that mandates the new seniority arrangement and wage/rule agreement for the newly merged territory. Since a New York Dock arbitrator is functioning as an agent of the Interstate Commerce Commission, he/she is bound to follow the legal precedent set down by the courts in connection with merger implementing agreements. The arbitrator may not vary from the legal precedent because he/she finds it to be unfair or inequitable.
Current law and precedent provides for the following:
Section 11321(a) of the Interstate Commerce Act provides that a merged railroad is immune from all laws (including contracts made pursuant to those laws) as necessary to carry out a merger.
In N&W v. ATDA, the United States Supreme court held that a merged railroad may abrogate an existing wage/rule agreement to the extent necessary to carry out a merger. In this regard, the Supreme Court of the United States provided the following:
SUPREME COURT OF THE UNITED STATES
March 19, 1991
Norfolk & Western Railway Company
V.
American Train Dispatchers Association
(499 U.S. 1179 Ill S.CT. 1156)
EXEMPTIVE LAWS FOR CARRIERS INVOLVED IN MERGERS APPROVED BY THE I.C.C.
Once the Interstate Commerce Commission (ICC) has approved a rail carrier consolidation under the conditions set forth in Chapter 113 of the Interstate Commerce Act (Act), 49 U.S.C. II 301 et seq., a carrier in such a consolidation 'is exempt from the antitrust laws and from all other law, including State and municipal law, as necessary to let [it] carry out the transaction 11341(a). In these cases, the ICC issued orders exempting parties to approved railway mergers from the provisions of collective bargaining agreements.
Held: The 11341(a) exemption "from all other law" includes a carrier's legal obligations under a collective-bargaining agreement when necessary to carry out on ICC approved transaction. The exemption's language, as correctly interpreted by the ICC, is clear, broad, and unqualified, bespeaking an unambiguous congressional intent to include **1158 any obstacle imposed by law.
This determination makes sense of the Act's consolidation provisions, which were designed to promote economy and efficiency in interstate transportation by removing *118 the burdens of excessive expenditure.
The Interstate Commerce Commission has the authority to approve rail carrier consolidations under certain conditions. 49 U.S.C. II 301 et seq. A carrier in an approved consolidation "is exempt from the antitrust laws and from all other law, including State and municipal law., as necessary to let [it] carry out the transaction... " 11341 (a). These cases require us to decide whether the carrier's exemption under 11341 (a) "from all other law" extends to its legal obligations under a collective bargaining agreement. WE HOLD THAT IT DOES.
What happened?
l) Work is moved;
m) Dispatchers made supervisors without rights of union protection.
The carriers notified the American Train Dispatchers' Association, the bargaining representative for certain N&W employees, *122 that they proposed to consolidate all "Power distribution" (the assignment of locomotives to particular trains and facilities for the N&W-Southem operation). To effect the efficiency move, the carriers informed the union that they would transfer work performed at the N&W power distribution center in Roanoke, Virginia to the Southern center in Atlanta, Georgia. The carriers proposed an implementing agreement in which affected N&W employees would be made management supervisors in Atlanta, and would receive increases in wages and benefits in addition to the relocation expenses and wage protections guaranteed by the New York Dock conditions. The union contended that this proposal involved a change in the existing collective-bargaining agreement that was subject to mandatory bargaining under the Railway Labor Act. (RLA), 44 Stat, 577, as amended, 45 U.S.C. 151 et seq. The union also maintained that the carriers were required to preserve the affected employees' collective bargaining rights, as well as their right to union representation under the RLA.
THE ICC HELD THAT THE MOVEMENT OF WORK WAS LEGITIMATE SINCE IT WAS PART OF A PLANNED APPROVED MERGER.
The Commission also held that because the work transfer was incident to the approved merger, it was "immunized from conflicting laws by section 11341(a)." Ibid. Noting that "[i]mposition of the collective bargaining agreement would Jeopardize the transaction because the work rules it mandates are inconsistent with the carriers' underlying purpose of integrating the power distribution function," the Commission upheld the decision to override the collective bargaining agreement and RLA provisions. Id., 1 at 37a.
ANOTHER CASE: CSX's ACQUISITION OF CHESSIE SYSTEM, INC. AND ITS IMPACT ON THE BROTHERHOOD OF RAILWAY CARMEN
In August 1986, the consolidated carrier notified respondent Brotherhood of Railway Carmen that it planned to close Seaboard's heavy freight car repair shop at Waycross, Georgia, and transfer the Waycross employees to Chessie's similar shop in Raceland, Kentucky. The carrier informed the Brotherhood that the proposed transfer would result in a net decrease of jobs at the two shops. Pursuant to New York Dock, the carrier and the union negotiated concerning the terms of an agreement to implement the transfer. The sticking point in the negotiations involved a 1966 collective-bargaining agreement between the union and Seaboard known as, the "Orange Book." The Orange Book provided that the carrier would employ each covered employee and maintain each employee's work conditions and benefits for the remainder of the employee's working life. The Brotherhood contended that the Orange Book prevented CSX from moving work or covered employees from Waycross to Raceland.
THE PARTIES MOVED UNDER THE GUIDELINES PROVIDED BY NEW YORK DOCK. THEY UPHELD THE CARRIER AND IT WAS APPEALED TO THE ICC.
THE ICC UPHELD THE PROCEEDINGS, IN PART.
THE MATTER RETURNED TO THE COURTS: WHICH SAID,
The court held that 11341(a) does not authorize the Commission to relieve a party of collective-bargaining agreement obligations that impede implementation of an approved transaction. The court stated various grounds for its conclusion. First, because the court did not read the phrase "all other law" in 11341 (a) to include "all legal obstacles," it found little if no support in the language of the statute to apply the statute to obligations imposed by collective-bargaining agreements, Id., at 244, 880 F.2d, at 567. Second, the court analyzed the Transportation Act, 1920, ch. 91 407, 41 Stat. 482, which contained a predecessor to 11341 override (a), and found that Congress "did not intend, when it enacted the immunity provision, to 'de contracts." 279 U.S. App.D.C., at ')47, 880 F.2d, at 570. The court noted that Congress had "focused nearly exclusively ... on specific **1162 types of laws it intended to eliminate--all of which were positive enactments, not common law rules of liability, as on a contract."
BUT, THIS DID NOT HOLD.
Our determination that 11341(a) supersedes collective-bargaining obligations via the RLA as necessary to carry out an ICC-approved transaction makes sense of the consolidation provisions of the Act, which were designed to promote "the economy and efficiency in interstate transportation by the removal of the burdens of excessive expenditure." Texas v. United States, 292 U.S. 522, 534-535, 54 S.Ct. 819m 825, 78 L.Ed. 1402 (1934). The act requires the Commission to approve consolidations in the public interest. 49 U.S.C. 11 343(a)(1)- Recognizing that consolidations in the public interest will "result in wholesale dismissals and extensive transfers, involving expense to *133 transferred employees' as well as "the loss of seniority rights,":
ANOTHER REALITY CREATED BY THIS DECISION:
The decision signifies a substantial filtering-down of authority from the courts, through the ICC, to arbitrators.
In ATDA v. ICC, U.S. Court of Appeals ruled, among other rulings, that Arbitrators hold jurisdiction to alter the terms of the Collective Bargaining Agreement (CBA) by the ICC now the STB. In that regard, the U. S. Court of Appeals ruled as follows:
U.S. COURT OF APPEALS
JUNE 28, 1994
AMERICAN TRAIN DISPATCHERS
v
ICC
(26 F.3d 1157,307 U.S. App. D.C. 93)
FACTUAL HISTORY
Pages 1159-1161, provides an excellent historical summary of mergers and acquisitions which cover:
n) CSX and the Chessy System, Inc. and Seaboard Coast Line, Indus.
o) CSXT and Lousville Nashville Railroad
p) CSXT's Shifting of Train Dispatchers (4)
q) Arbitrator's Ruling allowing CSXT to transfer the Dispatchers (4)
r) Upholding of Arbitrator's jurisdiction to alter the terms of the CBA by the ICC
SEARCHING FOR A DEFINITION OF "RIGHTS, PRIVILEGES AND BENEFITS"
ICC may define the terms.
This Court says that
s) "Work Transfers" do NOT infringe upon "Rights, Privileges and Benefits."
t) Transferred workers do NOT have the right to "follow their work", as suggested by New York Dock.
u) Existing Management Personnel may "Absorb the Transferred Work."
THE CONCEPT OF THE "NECESSITY" STANDARD
Continuing where Norfolk & Western left off, the ICC in its 1992 decision focused on the "necessity" and "approved transaction" predicates of section 11341(a). It decided that "...the necessity' predicate is satisfied by a finding that some 'law' (whether antitrust, [the Railway Labor Act], or a collective bargaining agreement formed pursuant to the [Railway Labor Act] ) is an impediment to the approved transaction." CSX Corp.--Control--Chessle Sys., Inc., and Seaboard Coast Line Indus., Inc., 8 I.C.C.2d at 721. Thus, it ruled, CSXT was exempted from any provisions of the collective bargaining agreements ... that might bar the immediate consummation of the transfer of dispatching functions."
In Executives, we held that to satisfy the "necessity" predicate for overriding a CBA, the ICC must find that the underlying transaction yields a transportation benefit to the public, "not merely [a] transfer [of] wealth from employees to their employer." 987 F.2d at 815. In other words, the benefit cannot arise from the CBA modification itself; considered independently of the CBA, the transaction must yield enhanced efficiency, greater safety, or some other gain.
EMPLOYEE DISPLACEMENT
Will occur when movement of work, centralization of functions can be shown to produce "efficiencies."
CONCLUSION
The ICC has the authority to approve work transfers where they are a "necessity" to the
process of "acquisitions" (mergers).
In UTU/BLE v. STB, ET AL. (108 F3d 1425) U.S. Court of Appeals ruled, among other rulings, that railroads were empowered to abrogate the (CBA). (The O'Brien Arbitration CSXT) In that regard , the U. S. Court of Appeals ruled as follows:
U.S. COURT OF APPEALS
MARCH 21, 1997
UTU/BLE
v
STB, ET AL.
(108 F3d 1425)
SUMMARY STATEMENTS
Edwards, Chief Judge: This case arises out of an effort by CSX Transportation, Inc. ("CSXT") to implement an approved merger of operations of portions of four former railroads into a new, consolidated rail district. In so doing, CSXT sought to abrogate terms of existing collective bargaining agreements ("CBAs") in order to merge separate seniority rosters from the former railways into single seniority lists for engineers and trainmen for the entire district and to place the employees of the consolidated district under one CBA.
The Supreme Court and this court have made it clear that the ICC may abrogate certain terms of a CBA as necessary to effectuate an ICC-approved transaction.
The questions at issue here are:
(1) whether established seniority provisions are within the category of interests that are subject to abrogation, and, if so
(2) whether the changes proposed by CSXT are necessary to effectuate the consolidation of railway operations that had been approved by the ICC.
The Commission answered affirmatively to each of these questions, and we can find no error in the agency's judgment.
O'BRIEN ARBITRATION
A neutral arbitrator found
(1) that the coordination proposed by CSX'T was linked to an ICC-approved transaction;
(2) that New York Dock arbitration was not barred by the terms of prior implementing agreements that made reference to Railway Labor Act ("RLA") bargaining;
(3) that CSX'T had shown that modification of existing CBAs was necessary; and
(4) that the proposed changes to the existing CBAs could be made, provided, as required by section 2 of the New York Dock rules implementing 49 UAS.C. 11347, they did not undermine protected "rights, privileges, and benefits."
CSXT EMPOWERED TO ABROGATE THE CBA
'The Commission ruled in favor of CSXT. See Commission decision, reprinted in J.A.224-41.
First, the ICC sustained the arbitrator's finding then CSXT's proposed coordination of train operations in the new, consolidated B&O Eastern District was linked to ICC approved merger and control transactions. See id at 8, reprinted in J.A. 231 a
Second, the Commission upheld the arbitrator's finding that prior implementing agreements of CSX'I' do not require that CSXT accomplish the coordination at issue here through Railway Labor Act ("RLA") bargaining procedures, as CSXT's proposed changed involve a different (i.e., greater) territory than that to which the prior agreements applied. See id at 10-12. reprinted in JA 233 35. 'the Commission also found that applying New York Dock rules in The instant case comports with the parties' prior implementing agreements. On several occasions, CSXT has consolidated operations within the territory of the former railroads and, without objection from the unions, applied New York Dock rules. See id.
Third, the Commission found that CSXT's proposed changes to seniority rights as established by CBAs were necessary to effectuate the ICC-approved transaction. The ICC also found that CSXT's proposed changes are not a device to transfer wealth from the employees to the railroad, and that the merging of the separate seniority districts will produce real efficiency benefits. See id. at 13, reprinted in senior J.A. 236.
Finally, the ICC determined that CSX'T's proposed changes do not involve "rights, privileges, and benefits" that are protected by 49 U.S.C. 11347 and section 2 of the New York Dock rules. The Commission noted that "rights, privileges, and benefits" include only "the incidents of employment, ancillary emoluments and fringe benefits." See id. at 14, reprinted in J.A. 237. The Commission concluded that the CBA provisions at issue in this case do not fall within the protected "rights, privileges, or benefits," as they involve scope and seniority changes of the type that consistently have been modified in the past in connection with consolidations. See id. at 15, reprinted in J.A. 238.
THE MERGER OF SENIORITY ROSTERS
In this case, we face two main issues:
(1) Whether CSXT's proposed seniority changes involve terms of a CB- A that are shielded absolutely from the ICC's abrogation authority and, if not,
(2) Whether the proposed changes are "necessary" to effectuate an ICC approved transaction.
RIGHTS, PRIVILEGES, AND BENEFITS
The unions argue that the commission erred in finding that CSXT's proposed merger of the seniority rosters in the consolidated district would not undermine protected rights. WE DISAGREE.
DEFINITION OF "RIGHTS, PRIVILEGES, AND BENEFITS"
In this case, the Commission offers a definition: "Rights, Privileges, and Benefits" refers to "the incidents of employment, ancillary emoluments or fringe benefits-as opposed to the more central aspects of the work itself-pay, rules and working conditions." See Commission decision at 14, reprinted in J.A. 237. And "the incidents of employment, ancillary emoluments or fringe benefits" refers to employees' vested and accrued benefits, such as life insurance, hospitalization and medical care, sick leave, and similar benefits. See id. at 15 reprinted in J. A. 238. According to the Commission, seniority provisions are not within the compass of "rights, privileges, and benefits" protected absolutely from the Commission's abrogation authority.
THE CONCEPT OF "NECESSITY"'
Under the Commission's interpretation, "rights, privileges, and benefits" are protected absolutely, while other interests that are not inviolate are protected by a test of "necessity," pursuant to which there must be a showing of a nexus between the changes sought and the effectuation of an ICC-approved transaction. Under this scheme, the public interest in effectuating approved consolidations is ensured without any undue sacrifice of employee interest. In our view, this is exactly what was intended by Congress.
THE "BENEFIT OF NECESSITY"
In Executives, we held that, in addition to finding a nexus between the proposed changes and an ICC - approved transaction to satisfy the 'necessity' predicate for overriding a CBA, the ICC must find that the underlying transaction yields a transportation benefit to tile public, "not merely [a] transfer [of] wealth from employees to their employer." 987 F.2d at 815, In other words, the benefit cannot arise from the CBA modification itself; considered independently of the CBA, the transaction must yield enhanced efficiency, greater safety, or some other gain." ATDA 26 F.3d at 1164 (quoting Executives).
CSXT argues, and the ICC accepted, that a consolidation of seniority rosters was necessary to effectuate the merger of the rail lines. This is both obvious on its face and was demonstrated by CSXT.
First, there is little point in consolidated railroads on paper if a consolidation of operations cannot be achieved. It is obvious that separate and distinct parts, operating separately and distinctly, will not generate the value of consolidation.
Second, CSXT demonstrated that changing crews at previous territorial boundaries of the former railroads, we would be required with separate seniority rosters, would increase costs and slow down transit times. Improvements in efficiency generated by a consolidated seniority roster will reduce CSXT's cost of service, resulting in reduced rates to shippers and ultimately to consumers. The unions offered no evidence to the arbitrator or Commission to challenge CSXT's contentions of improved efficiency, indeed, at oral argument, the unions' counsel conceded that these efficiencies are not open to dispute.
In short, the record supports the Commission's finding that CSXT's proposed changes to the CBAs are necessary to effectuate the ICC-approved transaction.
In summary, by asserting that it is necessary to modify or eliminate preexisting agreements in order to provide the public with increased efficiency and economy, the current state of the law permits a merged railroad to repeal and eliminate preexisting wage/rule agreements and seniority configurations.
The Yost Award in the Denver and Salt Lake City Hubs is the most current NYD ruling in connection with wage/rule agreements and seniority. The following lists sums up Arbitrator Yost's findings:
1. The carrier may pick any existing single agreement.
2. The carrier may eliminate all other agreements.
3. The carrier may combine yards into single terminals, consolidate pool freight, local and road switcher operations, and combine extra boards.
4. The carrier may pay out existing crew consist funds and create new funds.
5. The carrier may combine seniority rosters .
Most notably, as evidenced by the O'Brien Award on CSX--and now, the Yost Award on UP/SP, a New York Dock arbitrator has not only the authority but the legal obligation to modify, repeal, and/or replace existing wage/rule agreements in order to provide the public with benefits via" increased economies and efficiencies."
Correspondingly, these principles have been consistently upheld and reaffirmed by the United States Supreme Court, the Circuit Court of Appeals, the ICC and the STB. Moreover, for the same reasons, the arbitrator has the legal authority to eliminate entire existing agreements (e.g., SP Western Lines), replacing same with any other preexisting (e.g., UP/WP) agreement.
Given the current state of the law, it is of grave concern that the UP would pick any one of its UP agreements for imposition in all the hubs--just as it picked a modified version of the UP Eastern District Agreement in the Salt Lake Hub--and we would lose substantial agreement provisions without receiving anything in return.
Thus, the reason for renegotiating the current SP Western Lines agreement, to make it more closely coincide with existing UP agreements while gaining something in return for that which we were most unquestionably and inevitably going to lose.
I believe that we are better off negotiating our current agreement and modifying the UP agreements that were to inevitably have been imposed, keeping what we can and receiving enhanced NYD protection in return, is a far better course of action than having an existing UP agreement with less imposed by an arbitrator or the railroad by simply picking another agreement and receiving nothing in return.
The Union Pacific management is adamant that the current SP Western Lines agreement, without the proposed changes, will not be chosen as a surviving agreement in post merger implementing agreements in any of the Hubs. Why is UP management adamantly opposed to the SP Western Lines agreement? There are significant differences in the SP Western Lines agreement that conflict with National handling, and they are viewed by UP management to be extreme barriers in the railroads' ability to gain the economies and efficiencies of the merger. The following appeared to be the most important:
1. All UP committees are under the national wage/rule agreements. Thus, while they enjoyed wage and COLA increases during the last six years; and while they also received several lump-sum payments; they have endured the 130-mile basic day and a dramatic dilution in the line of demarcation between road and yard. Thus, road crews may do more yard work and vice versa.
2. The current extra board agreement was too lenient and was not comparable to all the other extra boards on the UP property. All of the extra boards on the UP have the same lay off, miss call, and loss of guarantee provisions as the new proposed agreement. In addition we were able to change some of the other conditions by allowing a maximum of 96 hours off, in lieu of 72 hours off, and conditions for deductions in guarantee are different than that of all the other UP agreements.
3. The ability to mark rest for 18 hours was not in line with the rest of the UP property rest rule.
4. The "Me Too" provisions were not in any other agreement and were unacceptable.
5. The ability not to drop vacant turns when the extra board was exhausted was not in any other UP agreement. Other UP agreements provide for the dropping of the vacant turns.
6. No other UP agreement gave the engineer an entitlement to Conductor Only or reduced crew allowances. Yours, pursuant to the proposed agreement, will be rolled into your Test Period Average (TPA) and guaranteed for length of protection. This payment was going to cease to exist under the current agreement when the Conductor Only supplemental fund ceased to exist. This period of time was when the reduce crew fund met or exceeded 1/3 of yearly earnings and was reaching that point at an alarming rate.
7. Other UP agreements do not have a run around rule.
8. No other agreement on the UP has a scope rule as well defined as the SP agreement.
9. $12.50 eating allowance is not in any other UP agreement.
10. Plant Rationalization Rule is not in any other UP agreement.
11. Disability and Life Insurance not in any other UP agreement.
12. Vacation agreement different from the National. All other UP agreements are covered by the National Vacation Agreement.
13. A common rule governing time claims system wide as is the case in all other UP agreements.
14. A common rule handling discipline appeals system wide as is the case in all other UP agreements.
The UP absolutely will not select the SP agreement to prevail in any of the Hubs with all of the above remaining intact. With the current state of the law the UP believes, and the law allows, that a different agreement than ours can and will be selected.
The question now is what is it that we get to keep?
1. The Engineer Reserve Board agreement that is better in pay than any other UP agreement.
2. A modified run around rule. This would have happened in Hub negotiations whether or not it was agreed to here.
3. Expungement of discipline after five (5) years. Not in any other UP agreement.
4. Mandatory classes on new technology and FRA changes. Not in any other UP agreement.
5. A fee for Company Officers to continue to accrue seniority. Not in any other UP agreement.
6. Requirement for the railroad to hire engineers. Not in any other UP agreement.
7. Full loss of earnings for jury duty pay for 60 days. Not in any other UP agreement.
8. Our old rest rule to be able to tie up for 8, 10, or 12 hours rest undisturbed at any time other than a terminal to terminal deadhead. Not in any other UP agreement. The other UP agreements have very restrictive conditions before an engineer may mark rest.
9. The ability to work your 6th and/or 7th rest day, at your discretion, with no offsets in NYD protection if you decide not to, in yard service. Not such a big ticket item with protection ,but a big item for new hires in certain locations.
10. Call and release rule requiring a half of basic day pay.
11. Earnings and loss of earnings. All of Article 12 of your current agreement.
12. Bereavement leave rule that requires payment whether or not you would have worked.
13. An agreement with which you are familiar and provides in most cases more than you were to have had imposed by another agreement, by one means or another, and receive nothing in return.
The above are only examples of what will remain. In essence, you kept every thing that was negotiated outside of National negotiations other than the agreement provisions outlined in what the UP could not live with, as stated above. You will inherit the National wage and rules agreement that conflicts with the SP agreement -- that which you would have had if the Southern Pacific had not argued poverty.
The question of what did I get for what I gave up is now in order. Automatic certification for all SP engineers working under a current SP Western Lines or EP&SW agreement. Now you may ask how important is "automatic certification"?
Most employees have the misguided belief that New York Dock automatically guarantees them six years of wage protection. Without automatic certification, nothing is further from the truth!
Q. What do we mean when we speak of certification?
A. When an employee is certified, he/she has been determined to be entitled to draw New York Dock benefits.
Q. What about automatic certification?
A. The employee has been deemed to be adversely affected, without argument, as a direct result of the merger. As such, he/she is entitled to draw New York Dock benefits.
Q. What is universal automatic certification?
A. Universal Automatic Certification means all employees (not just those who can prove they are adversely affected) will be automatically certified to draw New York Dock protection.
Q. What does the law provide in return (for allowing the carrier to destroy current agreements in the name of "efficiency") for the employees?
A. The Interstate Commerce Act mandates that we are entitled to fair and equitable post-merger agreements, and that New York Dock satisfies this standard. However, without automatic certification, the imposition of New York Dock does not guarantee that one employee will draw one dime of protection.
Q. What, if anything, does NYD guarantee?
A. Without automatic certification:
* It guarantees that each individual employee may put in a claim for wage protection and/or relocation allowance;
v) * It guarantees that if the claim is denied, the union may prepare an individual arbitration brief for each individual employee;
w) * It guarantees that the union must pay one half the cost of each individual arbitration case. Since this committee represents 1800+ members, the labor and cost of handling 1800+ individual arbitration cases is, obviously, staggering. Moreover, historically, when union members have been caused to submit to this process, statistics show we win about 50% of the claims and lose the other 50%. Thus, without automatic certification, it is likely that half our members will receive no protection.
In reality, without automatic certification, the imposition of New York Dock only allows each individual to go before an arbitrator and address two burdens of proof.
1. The individual must establish that he/she was adversely affected.
2. It must be established that the adverse affect has a direct connection to the merger.
Initially, it is not easy to establish adverse affect. In order to meet this standard, most arbitrators want to see a continuing pattern of a loss in wages for at least 90 days. Given the railroad's ability to manipulate the traffic flows and the work load, this is often an impossible task.
Furthermore, even when adverse affect is established, in many cases the arbitrator becomes convinced that the adverse affect is not directly connected to the merger, but rather is caused by a decline in business or an act of God. For example:
1. The railroad will tell the arbitrator that the claimant's loss of wages is because the UP lost a big grain, coal, or auto contract to the BN/SF due to poor on-time performance or the like. Accordingly, the UP will assert (and often prove to the satisfaction of the neutral) that same caused (for example) the loss of ten trains in each direction, each day, as well as the daily loss of five switch engines, three locals, and three road switchers. Thus, the claimant's loss was due to a decline in business and not as a direct result of the merger!
2. Another lost claim involves voluntary seniority moves. The claimant either voluntarily moves from one job to another or was bumped by someone, voluntarily moving from one job to another. However, the neutral decides that none of the displacements--which created the loss of earnings and the adverse affect--had a direct connection to the merger.
3. An "Act of God." The Feather River floods, which washed out the old Western Pacific route between Sparks and Roseville in early 1997, illustrate this principle. That is, the associated wage loss and relocation, even if the railroad is never rebuilt, was caused by the floods. Thus, an "Act of God," as distinguished from a cause having a direct nexus to the merger, caused the relocation and/or loss of earnings.
Q. Given these real world examples, it is obvious that universal automatic certification has a high value. How is it achieved?
A. In 999 cases out of 1000, an arbitrator will not impose automatic certification. First, he/she is reviewing individual cases when dealing with wage and relocation protection. Second, absent extremely unique and unusual circumstances, most arbitrators do not believe they have the legal authority to permit the parties to avoid dealing with their respective burdens of proof when it comes to high cost items, such as wage and relocation allowances. Thus, automatic certification--particularly universal automatic certification--is only achieved via a voluntary agreement.
Q. Here on the UP/SP, what did Arbitrator Yost say about automatic certification?
A. First, he held that the carrier is obligated to certify--as protected NYD employees--only the number of employees specified in the commitment letter, as increased by subsequent carrier implementing notices. As you may recall, the commitment letter that is referenced is a joint letter of agreement, between UTU International President Little and UP Vice President Marchant, dated February 26, 1996. It stipulates that throughout the entire newly merged territory, at least 1,409 employees will be certified as adversely affected. Additionally, Arbitrator Yost stated: "Some members of the organization's negotiating team apparently feel there is no need to reach a voluntary agreement in order to achieve automatic certification . . . ." (emphasis added). Thereafter, he went on to explain why this was a gross error on the part of the union.
All engineers working under SP Western Lines (including the former EP&SW) where the SP Western Lines agreement is selected will receive double the period of protection provided under New York Dock. For example, an engineer entitled to six years protection shall be entitled to twelve years protection. In this day and age of protection, this is rarely, if ever, able to be obtained. Some may believe that protection is of no value; however, the economy is cyclic and has periods of a down turn; in times such as these the value of protection is invaluable. Just as sure as there will be a sunrise tomorrow, so too shall the economy take a dive. This alone in many individual, and overall, cases equates to a lot of money and helps prevent the possibility of some time in the future having a severe drop in earnings power and not being able to meet our financial obligations.
After having said all of the above, we must now address what, if any, options or alternatives we may have. One option is to not ratify this proposed agreement and hope that the UP will select our agreement as is intact in one or more of the future Hubs. This option is not an option. I can tell all of you that the UP is adamant that they will not select the current SP Western Lines agreement in any of the Hubs as is intact. The only way that the SP Western Lines agreement will be selected in future Hubs is to make the SP Western Lines agreement look like all of the other UP agreements. Even though the SP Western Lines agreement may be the predominate agreement in many of the Hubs, in review of the Yost Award with the UTU, the STB stated that there is no known standard dictating "...a duty to adopt the predominate collective bargaining agreement that is in effect...."
One may believe that we can save our agreement by going to arbitration and that this may be a viable option. The ICC, STB, and the courts have permitted the railroad to pick the desired agreement. UP agreements are essentially an industry standard. Any arbitrator will be aware of the fact that most of the SP benefits were derived from the SP when it was in an extremely insecure financial status. Considering that many of those benefits were awarded in exchange for forfeiting wage increases and COLA's, and that the UP has already declared it is willing to give us wage and COLA parity with all of its other employees in exchange for gaining work rule parity, the idea of successfully keeping the SP Western Lines agreement in arbitration is highly, and most probably, unlikely. Moreover, if we were to end up in arbitration, we would most certainly lose the automatic certification for al l engineers which was previously outlined above.
It is readily apparent to me that none of the above options are a viable option taking into consideration the current federal law and legal precedence. Accordingly, I strongly recommend that this proposal be ratified and approved.
Fraternally,
E. L. Pruitt
General Chairman