Form 1 NATIONAL RAILROAD ADJUSTMENT BOARD Award No. 28943
THIRD DIVISION Docket No. MW-29071
91-3-89-3-511
The Third Division consisted of the regular members and in
addition Referee Gerald E. Wallin when award was rendered.
(Brotherhood of Maintenance of Way Employes
PARTIES TO DISPUTE:
(Union Pacific Railroad Company
STATEMENT
OF
CLAIM: "Claim of the System Committee of the Brotherhood that:
(1) The Agreement was violated when the Carrier assigned outside
forces (Armstrong Giltbedt Construction Company) to construct the Operations
Office building in Fife Yard, Washington from July 25 through September 2,
1988 (System
File
S-66/890007).,
(2) The agreement was further violated when the Carrier failed to
timely and properly notify and meet with the General Chairman concerning its
intention to contract out said work as required by Rule 52.
(3) As a consequence of the violations referred to in Parts (1)
and/or (2) above, Bridge and Building Carpenters D. H. Hector, G. D. Johnson,
G. S. Edmunds, G. G. Perrenoud and D. R. Scoville shall each be allowed one
hundred ninety-two (192) hours of pay at their respective straight time rates."
FINDINGS:
The Third Division of the Adjustment Board upon the whole record
and all the evidence, finds that:
The carrier or carriers and the employe or employes involved in this
dispute are respectively carrier and employes within the meaning of the
Railway Labor Act as approved June 21, 1934.
This Division of the Adjustment Board has jurisdiction over the
dispute involved herein.
Parties to said dispute waived right of appearance at hearing thereon.
This Claim challenges the propriety of Carrier's contracting out the
construction of a new Operations Office at its Fife Yard in Washington State.
The contractor worked a total of 960 hours between July 25 and September 2,
1988. The Claim is that each of five named Claimants should be compensated
for 192 hours at their straight time rates.
Form 1 Award No. 28943
Page 2 Docket No. MW-29071
91-3-89-3-511
This extensive record raises a wide range of issues concerning the
appropriateness of contracting out work under various Rules, including Rule
52, of the parties' Agreement. There are many prior decisions of this Board
which guide the handling of matters involving Scope, past practice, notice,
exclusivity, and the like under Rule 52. We, however, do not reach the substantive merits of those i
turns on a quasi-procedural issue.
The organization alleges that Carrier violated the Agreement in
failing to act in good faith with respect to the notice and meeting requirements of Rule 52. The rec
work four days prior to the meeting during which the Company and Organization
representatives "·.. shall make a good faith attempt to reach an understanding
concerning said contracting
....
The Carrier scheduled the date for the
meeting.
Because of the important nature of the issue and the unique facts of
the record on the property, extensive quotation from the parties' correspondence and Rule 52 will be
Rule 52 reads in full as follows:
"Rule 52. CONTRACTING
(a) By agreement between the Company and the
General Chairman work customarily performed by
employes covered under this Agreement may be let to
contractors and be performed by contractors' forces.
However, such work may only be contracted provided
that special skills not possessed by the Company's
employes, special equipment not owned by the Company,
or special material available only when applied or
installed through supplier, are required; or when
work is such that the Company is not adequately
equipped to handle the work, or when emergency time
requirements exist which present undertakings not
contemplated by the Agreement and beyond the capacity
of the Company's forces. In the event the Company
plans to contract out work because of one of the
criteria described herein, it shall notify the
General Chairman of the Organization in writing as
far in advance of the date of the contracting
transaction as is practicable and in any event not
less than fifteen (15) days prior thereto, except in
'emergency time requirements' cases. If the General
Chairman, or his representative, request a meeting to
discuss matters relating to the said contracting
transaction, the designated representative of the
Form 1 Award No. 28943
?age 3 Docket No. MW-29071
91-3-89-3-511
Company shall promptly meet with him for that purpose.
Such Company and Organization representative shall make
a good faith attempt to reach an understanding c2ncern
ing said contracting but if no understanding is reached
the Company may nevertheless proceed with said con
tracting, and the Organization may file and progress
claims in connection therewith.
(b) Nothing contained in this rule shall affect
prior and existing rights and practices of either
party in connection with contracting out. Its purpose
is to require the Carrier to give advance notice and
if requested. to meet with the General Chairman or his
representative to discuss an poes a reac an
understanding in connection therewith.
(c) Nothing contained in this rule requires that
notice be given, conferences be held or agreement
reached with the General Chairman regarding the use of
contractors or use of other than maintenance of way
employes in the performance of work in emergencies
such as wrecks, washouts, fires, earthquakes, land
slides and similar disaster.
(d) Nothing contained in this rule shall impair
the Company's right to assign work not customarily
performed by employes covered by this Agreement to
outside contractors." (Underlining supplied)
Carrier's contracting out notice dated June 30, 1988 read as follows:
"This is to advise of the Carrier's intent to contract the construction of an Operations Office
Fife, Washington.
This type of work has customarily been performed
by outside contractor's forces. The Carrier has
neither the skilled manpower nor the proper equipment
to safely and competently undertake and complete this
project in a timely manner.
Serving of this 'notice' is not to be construed as
an indication that the work falls within the 'scope'
of your agreement, nor as an indication that such
work is necessarily reserved to those employes
represented by the
BMWE."
Form 1 Award
No.
28943
Page 4 Docket
No.
MW-29071
91-3-89-3-511
By letter dated July 12, 1988, the
General Chairman
wrote back challenging the Carrier's plans. This four page letter claimed the work was
covered by the Scope Rule and alleged violations of the permissible conditions
for contracting found in Rule 52(a). It provided lengthy supporting argument
and also alleged a violation of the industry Letter of Understanding dated
December 11, 1981 which, among other things, promised good faith efforts to
reduce the incidence of subcontracting. In addition, the General Chairman's
letter contained the following request:
"Provided the Carrier chooses to ignore this advice
and intends to contract this work out in any event,
I request a conference be scheduled and held prior to
the work bean assi ned to and erformed b a con-
tractor, . Under ining supplied
Carrier's response dated July 19, 1988, read as f-?lows:
"Reference your letter of July 12, 1988, concerning the Carrier's intent to contract the constru
of an Operations office at Fife, Washington.
Initially, the notice of intent does not imply
that the work in question comes under the scope of
your Agreement. The Company has a history and past
practice of contracting the type of work.
In any event, I am willin to discuss this issue
at 10:00 A.~. on July 2 , 1988 in my office at Omaha,
Nebraska." Underlining supplied
According to the record, the General Chairman and the Carrier representative did meet in Omaha o
1988, the Company representative reported the results of the conference. The
letter incorrectly lists the date of the conference as being June 24, 1988.
In addition to several other defenses, it listed two Carrier defenses found in
parts (b) and (d) of Rule 52, and it quoted from prior decisions of this Board
(Third Division Awards 27010 and 27011) where these defenses were recognized.
It also challenged the applicability of the December 11, 1981 industry Letter
of Agreement to their Agreement. Significantly,. the letter does not mention
thaw.tbAkvD*.pev~ alssaaiWunderway nor does it claim emergency circumstances.
It closed as follows:
"*
* * For these reasons I indicated to you it was
the Carrier's intent to proceed with the contracting
as proposed."
The General Chairman responded by letter dated August 22, 1988. 81s
letter also listed the incorrect date of June 24, 1988, for the conference.
It again argued the Organization position and listed what were felt to be
shortcomings in the Carrier position. In its list was this claim:
Form 1 Award No. 28943
Page 5 Docket No. MW-29071
91-3-89-3-511
"(7) I do not believe the Carrier has made a good
faith attempt to work something out with this Organ
ization which would hopefully be satisfactory to both
parties."
The next event of record was the filing of the Claim on September 15,
1988. It did not mention that the work commenced four days prior to the July
29, 1988, Omaha meeting. It did allege a violation of several Rules, including Rule 52, and the Dece
Carrier responded with a denial letter dated October 18, 1988. It
asserted an historical practice of contracting out the type of work in question and lack of exclusiv
The Organization appealed, dated December 29, 1988, and again
alleged, among other things, a violation of Rule 52. The Carrier response,
dated February 27, 1989, again raised Rule 52 defenses provided in parts (b)
and (d) of the Rule.
The matter was again discussed in conference on April 20, 1989. The
Carrier issued a six page conference response, dated June 16, 1989, denying
the Claim. The Rule 52(b) and (d) defenses were quoted once again. Language
from several prior Awards was also cited along with some collective bargaining
history. In addition, his letter contained the following sentence:
"Records also indicate notice was served as required under
Rule 52. (copy attached)." (Underlining supplied)
The General Chairman wrote again to the Carrier advocating the Organization's position. This let
responded, the General Chairman wrote the Carrier again on September 18, 1989,
to advise of his discovery of what he described as a "significant discrepancy." In a five page lette
of Carrier's actions by explaining his recent discovery of the incorrect June
24, 1988 date for the contracting discussion conference in Omaha. Pertinent
portions of the letter follow:
"In reviewing the U-52-8032 file you will note the
Carrier did not serve its notice of intent until June
30, 1988. In light of this fact, it is obvious that the
June 24, 1988 date to which each party referred could
not have been the date for the conference. Further
review of the file indicates that Mr. Shannon proposed
that the two (2) parties meet to discuss the contemplated transaction on July 29, 1988. I traveled t
Omaha and discussed the matter with you on July 29, 1988
as proposed in an unsuccessful attempt to persuade the
Carrier to utilize its own Maintenance of Way forces to
perform the work associated with the project.
Farm 1 Award No. 28943
Page 6 Docket No. MW-29071
91-3-89-3-511
My reason for referring to this as a 'significant'
discrepancy of the facts is because the true facts of
the matter as outlined herein clearly reveal the
Carrier did not comply with the 'good-faith' provi
sions of Rule 52 or commitments given this Organiza
tion by NRLC Chairman C. I. Hopkins previously. The
following is a quote taken from Rule 52:
(Quotes last sentence of Rule 52(a))
In a letter dated December 11, 1981, NRLC Chairman
C. I. Hopkins made the following written commitment to
this Organization:
(Quotes 'good-faith' portions of the letter)
As you can see from this information the parties are
to meet to make a good faith attempt to reach an understanding prior to the work being perfor
Carrier had contracting forces commence operations on
this project July 25, 1988, four (4) days before the
Carrier scheduled or held the conference at which good
faith discussions were to take place. At the conference
held July 29, 1988, 1 was unaware that the work had
obviously already been farmed out and I engaged in what
I thought were good faith discussions. Since the work
was already contracted to outsiders and had already
begun, it appears the Organization was the only party
engaged in good faith bargaining which disappoints me
greatly.
I must also point out that no time restrictions or
self-executing cancellation clauses are contained in the
December 11, 1981 letter of Agreement which could be
applied. * * * the 'good-faith' clauses contained in
our current Agreement and the December 11, 1981 letter,
are still in effect. Further, the Carrier's obvious
total disregard for same is considered to be a violation
of each."
The Carrier responded on September 28, 1989, to the Organization's
new charge of bad faith as follows:
"This refers to your letter dated September 18,
1989, File U-52-8032.
Form 1 Award No. 28943
Page 7 Docket No. MW-29071
91-3-89-3-511
Whatever the date of the conference was, the impor
tant fact here is that a conference was held during
which no change in the Company's intent to contract out
the work in question was agreed to. Therefore, whether
the conference has been held sooner or held later, the
outcome would have been the same. That is, no matter
when the conference was held, the same set of facts
would have come to bear, and those facts would have led
to the same conclusion. The timing of the conference
lends absolutely nothing to your frequently made charge
of 'bad faith.'
As you know, timing of the conference on subcon
tracting has been left primarily in your hands. The
conference dates are set primarily at your initiative.
Given your involvement in scheduling the conference
dates, it seems to me that there is something intri
cately wrong with your attempt to take those dates, turn
them around and use them as evidence of bad faith on the
part of the Company. The fact that a conference was
held is in and of itself an indication of good faith on
the part of the Company in conformance with the require
ments of Rule 52.
As we have discussed many times in the past, the
December 1, 1981 Hopkins' Understanding is not appli
cable on the Union Pacific. Subcontracting on the UP is
not covered by the National Agreement; it is covered ex
clusively by Rule 52. The December 11, 1981 Hopkins'
letter applies to application of the National Agreement
only; it does not reach Rule 52. Furthermore, the
December 11, 1981 letter was limited in its application
to scope covered work, which is not at issue here.
If there is any bad faith involved in this case it
is on the part of the Union in attempting to use the
grievance and arbitration process to modify the Labor
Contract as opposed to use of the negotiation process.
The Company isn't doing anything different with respect
to subcontracting than it has ever done. What has
changed is not the rules or the practice of the Company;
what has changed is the attempt of the Union to create
grievances and use them as a vehicle for modifying the
Labor Contract." (Underlining supplied)
Following the above exchange regarding the issue of good faith, the
Carrier, on October 10, 1989, formally issued a denial to the Organization's
outstanding June 27, 1989 appeal. This denial was silent on the subjects of
good faith and Rule 52 and raised no new issues or argument.
Form 1 Award
No.
28943
Page 8 Docket
No.
MW-29071
91-3-89-3-511
On November 22, 1989, the Organization issued its letter of intent to
file with this Board thereby closing the record on the property.
In its Ex Parte Submission, Carrier again raised all of the defenses
it used on the property. In addition, it contended that Rule 52 had no application to the matter at
employees covered by the Agreement is subject to the restrictions of Rule 52.
It went on to argue that if employees covered by the Agreement do not customarily perform particular
and meet in conference prior to contracting the work.
This Board has carefully reviewed and rereviewed the extensive record
herein. As a result, we reject the Carrier's contentions regarding the
inapplicability of Rule 52 to the facts at hand for three reasons. First, and
probably most importantly, it is new argument that was not presented on the
property. The Organization has properly objected to its consideration. In
keeping with long established precedent, we will not consider such de novo
argument here.
Second, Carrier's new argument is inconsistent with its position on
the property. It made repeated references to its compliance with the notice
requirements of Rule 52 and specifically said, in its September 28, 1989,
letter quoted earlier, that subcontracting is covered exclusively by Rule 52.
Indeed, it never denied having to satisfy the good faith meeting requirement
the Organization asserted it had. Moreover, while it did contend that the
December 11, 1981 Letter of Agreement applied only to Scope covered work, it
did not make the same contention regarding Rule 52.
Third, Carrier's new argument is inconsistent with the prior decisions of this Board. The Board
that the advance notice and meeting provisions are required whenever any
contracting is done, whether the work is "customarily performed" or not. We
find the Carrier Members Concurrence and Dissent in that Award to be imaginative but strained and un
27011. Several other Awards of this Board also recognized the notice and
meeting requirements of Rule 52(a) to be applicable despite denial of the
claim under the Rule 52(b) past practice exception. See, for example, Awards
28558, 28619 and 28622.
In light of the foregoing, it is not necessary for us to decide
whether the December 11, 1981 Letter of Agreement applies to impose a good
faith meeting obligation in addition to Rule 52. We find the notice and
meeting provisions of Rule 52 to be sufficient, in and of themselves, to
establish such a requirement.
The Organization has alleged a failure to act in good faith on the
part of the Carrier and has provided sufficient evidence of the charge to
shift the burden to the Carrier to show that it did act in good faith. On the
unique record before us, we find that Carrier has failed to satisfy its burden. It has offered no ex
for the commencement of work prior to the good faith discussion meeting with
the General Chairman.
Form 1 Award No. 28943
Page 9 Docket No. MW-29071
91-3-89-3-511
The importance of good faith dealings in the labor-management context
cannot be overstated. It is a fundamental element of an effective relation
ship. In view of the foregoing findings, it follows that Carrier did not
properly contract out the work in question. Because of the nature of the
violation, it cannot be treated as a mere technical violation of the Agreement.
The Carrier has sustained its burden of proving that one of the named
Claimants was fully employed throughout and suffered no cognizable lost work
opportunity. The other four were furloughed and did, under the facts of this
matter, suffer a lost work opportunity. They should each be compensated for
192 hours of straight time pay as claimed.
A W A R D
Claim sustained in accordance with the Findings.
NATIONAL RAILROAD ADJUSTMENT BOARD
By Order of Third Division
Attest:
4ancy J. D - Executive Secretary
Dated at Chicago, Illinois, this 29th day of August 1991.
CARRIER MEMBERS' DISSENT
TO
AWARD 28943, DOCKET MW-29071
(Referee Wallin)
In dissenting to the Majority's holding in this case,
only one Award of an experienced referee will be cited:
The Award is Third Division Award 28850, involving the
same parties to this dispute, and the same issue. The Board
concluded:
"The Board lastly hotes that it found no evidence
that the Organization's requested meeting to discuss the contracting
transaction was
not agreed
to by the Company or would not promptly have
taken place. Rule 52(a) states that 'if the
General Chairman... requests a meeting..., the
Company shall promptly meet with him
....'
There
is no record that the Organization suggested any
'mutually convenient time' ox that the Carrier
avoided its contractual responsibilities and
acted in bad faith. For the reasons stated, the
Claim must be denied."
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V
M. . Fi~rhut
L: fi'icks - `"
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M. C esnik
P. V. Varga
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AWARD 28943, DOCKET MW-29071
The dissent was correct in that the two awards referred to
involved the same parties and the same issue. However, the issue
involved a different fact pattern in that Award 28850 dealt with a
dispute wherein the Carrier had given advance notice prior to
contracting out the work and the Organization had not properly
requested that a conference be held. In this award, the Carrier
notified the Organization of its plans to contract out the work and
the Organization properly requested that a conference be held prior
to the commencement of the work. The Carrier scheduled the
conference for July 29, 1988 but allowed the work to commence four
days prior. Obviously, the Carrier had no intention of dealing
with this Brotherhood in good faith as required by the Agreement.
Hence, the Board appropriately held that:
"The importance of good faith dealings in the labormanagement context cannot be overstated. It i
fundamental element of an effective relationship. In
view of the foregoing findings, it follows that Carrier
did not properly contract out the work in question.
Because of the nature of the violation, it cannot be
treated as a mere technical violation of the Agreement."
Respectfully submitted,
D BarthOlOmay
Labor Member
CARRIER MEMBERS' REPLY
TO
ORGANIZATION MEMBER'S RESPONSE
To
AWARD 28943, DOCKET MW-29071
(Referee Wallin)
In the dispute that led to Third Division Award 28850,
the Organization requested a conference to discuss the
Carrier's contracting out notice in the following manner:
"Provided the Carrier chooses to ignore this
advice and intends to contract this work out in
any event, I request a conference be scheduled
and held prior to the work being assigned to and
performed by a contractor, for the purpose of
discussing the matters relating to said contracting transactions."
The Organization's Reply in this dispute refers to the
Organization's request for a conference in Award 28850 and
states:
"...Award 28850 dealt with a dispute wherein the
Carrier had given advance notice prior to contracting out the work and the Organization had
not properly requested that a conference be
held."
In this dispute, the Organization's request for a
conference was made as follows:
"Provided the Carrier chooses to ignore this
advice and intends to contract this work out in
any event, I request a conference be scheduled
and held prior to the work being assigned to and
performed by a contractor, for the purpose of
discussing the matters relating to said contracting transaction."
The Organization concedes that the organization's
request for a conference in the dispute in Award 28850 was
not proper and yet finds the request here was proper
notwithstanding the fact that the language is identical.
CMs' Reply to OM's Response
Award 28943, Docket MW-29071
Page 2
The position of the Hoard in Award 28850 on the issue
of conference is that good faith is a two-way street and the
organization has no less responsibility in this area than
does the Carrier. If the Majority here had followed that
sage approach, the claim would have been denied.
WW16*1111~jj
M. .-Fingbrhut V
a~;&.
L. Hicks
M. C. Lesnik
P. V. Varga
aLvv~ww
ORGANIZATION MEMBER'S RESPONSE
TO
CARRIER MEMBERS' REPLY
TO
ORGANIZATION MEMBER'S RESPONSE
TO
CARRIER MEMBERS' DISSENT
TO
AWARD 28943, DOCKET MW-29071
(Referee Wallin)
It is gratifying to read that at least the Carrier Members
recognize that "good faith is a two-way street.
In the original response to this award, I pointed out that the
request for a conference in Award 28850 was not properly based on
the fact that the Organization had acquiesced in delaying the
holding of the conference. In this dispute, the Organization had
properly requested a conference and the Carrier responded by
setting a date which it had not done in the prior award. Hence,
since the work had started four days before the conference was
held, it is obvious that "good faith" was not part of the Carrier's
demeanor in this dispute.
Respectfully submitted,
D. D
Bartholomay
Labo Member