The Third Division consisted of the regular members and in addition Referee Edwin H. Benn when award was rendered.
This Division of the Adjustment Board has jurisdiction over the dispute involved herein.
This is a claim for protective benefits under Article XV of the 1996 National Agreement. The Organization asserts that the Claimant is entitled to those benefits as a result of the Carrier's contracting out the transportation of roadway work equipment during the period February 20 - 25, 1998 which the Claimant could have performed.
Before discussing the specifics of the present claim, certain background information concerning Article XV and the Organization's information requests must be addressed.
Following the recommendations of PEB 229, the parties adopted a new subcontracting provision for the 1996 National Agreement:
Form 1 Award No. 36983By letter dated April 4, 1997, the Organization reminded the Carrier that the March 31, 1997 filing deadline for the 1996 R-I Report had passed and stated, ". . . we are requesting you provide the information that we requested in our January 24, 1997 letter since the 1996 R-1 is completed and the information is now available."
By letter dated August 6, 1997, the Organization again referred to its information request of January 24, 1997 and stated that the requested information had not yet been provided. The Organization amended its previous information request by adding the following:
By letter dated September 30, 1997, the Carrier responded that ". . . we note that Article XV places no obligation on the carrier to provide any information to the organization in connection with implementation of that provision" but ". . . as a courtesy and in the interest of working cooperatively with you to facilitate the appropriate implementation of Article XV, we will provide the above-cited information you have requested." The Carrier then referred to exhibits the Carriers submitted to PEB 229 and advised the Organization that it had made a request from the National Railway Labor Conference (NRLC) to provide it with the following information:
The Carrier, by letter dated September 30, 1997, provided the Organization with a copy of the NRLC's September 24, 1997 response to the Carrier's request for information ". . . which addresses the publicly reported information you have requested." The Carrier also rejected providing the monthly information requested by the Organization because as the Carrier interpreted Article XV, only an ". . . Form 1 Award No. 36983
annual comparison lis required] since the benchmark ratio is based on five years of data that is reported only on an annual basis."
The September 24, 1997 letter to Carrier from the NR,LC Director Economic Research C. L. Kearns given by the Carrier to the Organization states, In pertinent part, that "[t]he source of the data is Schedule 410 of the R-1 Annual Reports . . . (and data for the Burlington Northern Railroad and the Atchison Topeka & Santa Fe Railway Co. have been combined for the years 1992-1995" and provides the following information:
By letter dated June 29, 1999, the Carrier again addressed the Organization's information requests and advised the Organization:
Turning to the specifics of the claim in this matter, the Claimant had been on furlough since January 1998. During the period February 20 - 25, 1998, the Carrier utilized Bestway Machinery Transport to operate a lowboy tractor-trailer to transport the Carrier's roadway equipment from Dilworth, Minnesota, to Barstow, California, at a time when the Claimant was on furlough. The Organization asserts that under Article XV, the Claimant is entitled to an allowance equal to the New York Dock level of protection for a dismissed employee.
In denying the claim, in its letter of August 12, 1998, the Carrier advised the Organization "[a]s to your assertion that Article XV of the 1996 National Agreement was violated, you have offered no evidence in support of your claim" and further stated that under Article XV ". . . you have not proven that either condition exists in this case." The Carrier took the position that because the Claimant was on furlough in January 1998 and because the disputed contracted work was performed between February 20 - 25, 1998, the Claimant could not have been on furlough because of the contracting out of the work. The Carrier also denied that the Organization is entitled to have the "engineering ratio" computed on a monthly basis.
In its letter of May 18, 1999, the Organization referred to the Carrier's assertion that the Organization had not carried its burden of proof:
Form 1 Award No. 36983
In this industry, subcontracting disputes are a flashpoint - and for obvious reasons. The employees, at times while on furlough, see work they have performed being performed by strangers to their Agreements. The Organizations see their base of actively working members eroding as the Carriers contract out scope covered work. On the other hand, the Carriers need work performed, often expeditiously, which their existing forces may not, for manpower, availability of necessary equipment, or qualifications reasons, be able to perform in accord with the Carriers' needs. Further, the Carriers rely upon their inherent rights to run their railroads consistent with their managerial prerogatives and best business Form I Award No. 36983
judgments, not to mention past practices of using subcontractors to perform work. The result is an extraordinary amount of litigation which the Board, Public Law Boards and Special Boards of Adjustment must resolve. The end product is not always helpful to the Carriers and Organizations as guides to charting their future courses of conduct under existing contract language governing subcontracting. Nor is that end product always helpful to the dispute resolution process itself which seeks to give stability to the parties. See e.g., Third Division Award 32862:
Article XV of the 1996 National Agreement offers a way of potentially reducing the chaos of subcontracting disputes resulting from language in prior Agreements. In Article XV, the parties agreed, consistent with recommendations of PEB 229, that based upon a ratio of adjusted Engineering Department purchased services to the total Engineering Department budget for the period 1992 - 1996, "jtjhe amount of subcontracting on a carrier . . . will not be increased without employee protective consequences."
In this particular case, the Organization argues that the Claimant is entitled to those protective benefits as a result of the Carrier's subcontracting certain work. The Carrier disagrees for a number of reasons. However, for our purposes, one of Form 1 Award No. 36983
the Carrier's reasons is determinative for presently resolving a critical aspect of this dispute.
The Carrier argues that the conditions required by Article XY for payment of the protective benefits to the Claimant have not been demonstrated by the Organization. Specifically, as stated in the Carrier's June 29, 1999 letter, after referring to the need of the Organization to demonstrate ". . . for . . . calendar year 1998 . . . the amount of subcontracting on BNSF, measured by the ratio of adjusted Engineering Department purchased services . . . to the total Engineering Department budget, actually increased beyond the level of the same ratio for the base period 1992-1996 . . .", the Carrier states that the Organization ". . . utterly failed to provide supporting evidence" to substantiate its claim.
But this record shows that since January 1997, the Organization requested specific information from the Carrier which would establish the ratios called for in Article XY and all the Carrier produced is a summary of information on an annual basis prepared by the NRLC taken from the R-1 Annual Reports. As stated in its May 18, 1999 letter, the Organization protested the Carrier's refusal ". . . to provide any documentation relative to the amount of engineering department purchased services for the base period, 1992 through 1996" and also sought such information based on "a monthly basis", which the Carrier refused to produce.
The above shows that for the ratios required by Article XY, the Carrier supplied the Organization with summary information on an annual basis taken from the R-1 Reports; refused to supply any documentation supporting those summaries; refused to supply information relative to the ratios computed on a monthly basis; and took the position that the Organization had not met its burden of proof that the ratios specified in Article XY were exceeded because the Organization ". . . utterly failed to provide supporting evidence." The Carrier cannot provide summaries, refuse to provide the Organization with access to the underlying documentation which formed those summaries, and then argue that the Organization failed to provide "supporting evidence" that the ratios were exceeded. The Organization cannot provide that "supporting evidence" because the Carrier Is in possession of the "supporting evidence" and the Carrier refused to allow the Organization to see that "supporting evidence." Form 1 Award No. 36983
It has been held that failure to produce evidence relied upon by a carrier in defense of a claim could result in the drawing of negative inferences and even sustaining of the claim. See Third Division Award 18447:
Contrary to the Carrier's assertions, the Board has broad discretion and jurisdiction, particularly with respect to the formulation of remedies and actions we can require the parties to take so that we can decide disputes which come before us. The Carrier is relying upon summary information to support its position in this case and, at the same time, it refused the Organization's requests to view the source information for those summaries. Although we have the discretion to do so, because we believe that the Carrier acted in good faith and because we are advised that this is the first dispute under this language to reach this level, we shall not presently sustain the claim on its merits because the Carrier did not provide the requested information. We have no reason to doubt the accuracy of the summary information provided. However, because the basis for that information has been challenged and the Carrier has not disclosed the underlying information used to formulate the summaries, we have nothing before us which supports the accuracy of that summary information. But, where the Carrier takes the position that the Organization has not provided "supporting evidence" for its claim as it did in this case and that "supporting evidence" is totally within the Carrier's control and may Form 1 Award No. 36983
well dispose of the entire dispute, basic concepts of fairness require that the Organization be allowed to examine that source information. We shall, therefore, require the Carrier to make available to the Organization the source documentation used to prepare the summaries relied upon by the Carrier. Should the Carrier fail to make that source information available, we will sustain the claim.
There is a dispute also concerning disclosure of information used by the Carrier in determining the various ratios for periods after the 1992 - 1996 base period specified in Article XV. The Organization requested to see the Carrier's "monthly data" concerning periods after that base period, which the Carrier refused to produce. See the Organization's letter of August 6, 1997 (where the monthly data request was made) and compare the Carrier's September 30, 1997 response (where the Carrier rejects that request asserting that only an "annual comparison" is required).
We find that the Organization is entitled to inspect the Carrier's records concerning the relevant information for periods of less than an annual reporting period. Article XV specifies the base period of 1992 - 1996 for determining the appropriate ratios. However, Article XV is silent with respect to the periods to be examined "[i]n the event that subcontracting increases beyond that level" [of the base period]. Under the Carrier's interpretation that it need only disclose information on an annual basis, furloughed employees and the Organization may have to wait up to one year until the Carrier provides its annual information when it files the R-I Report for the employees and the Organization to know whether the employees are entitled to benefits under Article XV. Yet, although not specifically required by Article XV, the New York Dock benefits "for a [New York Dock] dismissed employee" referred to in Article XV are monthly benefits. Article 1(6)(a) of New York Dock provides that "[a] dismissed employee shall be paid a monthly dismissal allowance, from the date he is deprived of employment and continuing during his protective period . . . ." jEmphasis added.] We do not know if the Carrier keeps such records on a "monthly" basis or on some other periodic basis of less than one year. However, if the Carrier does have such records relevant to determining the ratios on less than an annual basis, we find the Organization is entitled to inspect those records as well.
We also note that the Organization contended that the Carrier had not provided information concerning certain projects (e.g., the Stampede Pass). Given that we have required the Carrier to disclose the source documents for its annual Form 1 Award No. 36983
summaries, the Organization should be able to ascertain what projects were included or excluded from the Carrier's annual summaries. We, therefore, presently find that aspect of the dispute moot.
This matter is now remanded to the parties to take action consistent with the terms of this Award. We decide no other issues aside from those discussed concerning the providing of information. Specifically, we express no opinion on whether the Claimant was ". . . furloughed as a direct result of such increased subcontracting . . . ." Indeed, if there was no "increased subcontracting" as contemplated by Article XV, because this claim seeks protective benefits for the Claimant, then the question of whether the Claimant is entitled to those benefits is moot. Nor do we express an opinion on whether the ratios provided by the Carrier are accurate. Similarly, we do not express an opinion on whether the subcontracting was justified because the Carrier's equipment was inadequate. We have only decided that because the Carrier relied upon its records as a defense to the claim, refused to allow the Organization to see the source documents for its summaries that it relied upon and then took the position that the Organization had not provided supporting evidence to substantiate the claim, that the Carrier is now obligated to allow the Organization to inspect the source documents used by the Carrier in formulating the summaries that the Carrier used in defending this claim.
We recognize that problems may arise concerning the method of disclosure of information, who is entitled to see the information, protections for the Carrier's business records and the like. We shall leave those questions to be resolved by the parties in the first instance as they implement the terms of this Award. The Board shall retain jurisdiction over disputes, if any, which may arise as a result of this Award.
This is no small, simple discovery dispute. Given the national scope of Article XV, the chaos that resulted from prior subcontracting disputes, and in an effort to provide stability and guidance to the parties in this most volatile area, it is imperative that the parties to this dispute - indeed, all parties to the National Agreement - know the precise numbers and methodologies to be used in determining the ratios in Article XV so that they can determine whether those ratios were exceeded in individual cases. The parties' knowledge of that information to a certainty will prevent future challenges to the basis for the Article XV ratios. Form 1 Award No. 36983
This Board, after consideration of the dispute identified above, hereby orders that an award favorable to the Claimant(s) be made. The Carrier is ordered to make the Award effective on or before 30 days following the postmark date the Award is transmitted to the parties.
Article ACV provides a two-pronged test of eligibility, the ,of which is whether the Claimant's furlough was the "direct result" of the particular contracting incident (Bestway Tramper* conveyance of eguipmeut~ If the Organization offered Iusufficient evidence on that threshold !sane-_. then the Board mast dismiss the claim without reaching the question of whether the Carries exceeded ifs contracting ratio. O= that basis, the Board wax obliged to dismiss this claim. After 4 the Organisation offered absolutely no evidence on this issue, and such decisions as Award I of the New 'York Dock Board (ICC Docket No. 29430) have pointed toward a presumption against coverage of employees who are furloughed before the contracting incident; Instead, without any evidence to impugn the accuracy of the Carrier's R-1 Reports, the Board improperly issued its discovery order:
It is amazing that the Board has purported to find authority for awarding a remedy that was never requested in this claim, but defined to render a decision on the aserits of tine case: Thus the Board managed to exceed its jurisdiction while entirely failing to perform its basic function under the Railway Labor Ach to resolve disputes. Tim elect of that palpable error in this Award would have a mischievous and onerous Impact upon the entire railroad industry.
Nowhere in its claim has the Organization requested a right of discovery of documents, yet the only decision remdercd fad this Award is to grant document discovery where no such contractual right or statutory authority exists. The dispute before the Board seas simply whether the Claimant was "furloughed as a direct result" of the Carrier's contracting; and if so, whether ho was entitled to the New York Dock level of benefits under Article XV of the 1996 National Agreement. But the Board never even addressed the merits of the elahn, and instead converted this arbitration into a documentdiscovery proceediu&
Basically, the Board seems to have founded its Award on the flawed premise that the Carrier had raised some sort of affirmative defense, for which it was obligated to produce more records to prove up. But that is not true; the Carrier merely pointed out that the Organization had produced no evidence, at alit to support its claim. Pointing out the weakness of an adversary's case L not the same as raising an affirmative defame. Moreover, the R·i evidence that the carriers produced was apparently good enough for PEB 229 when it fashioned Article XV, Why fit was not good enough for the NItAD remains a mystery. In any event, when the Carrier produced then R-I Reports that was evidence on the ratio issue, which is certainty more than the zero evidence offered by the Orgonixadon to support its claim.
By ignoring the fact that the Organization did not offer any evidence to support even a prima facie case, let alone satisfy the two-pronged test under Article XV, the Board improperly placed the burden of proof in this case, and thereby prejudiced the carrier's rights. Moreover, because it is undisputed that the Organization never produced evidence
Carrier Members' Dissenti the Board was simply outside Sts aarthorttp is JSsuiag a discovery order that the Carrier must open its books to provide the Organization with an opportunity to try to discredit the only evidence either side had offered before the record closed.
in defending Its extraordinary discovery order, the Board asserted that it bar "broad discretion" as to the "actions we can require the puties tot"..." Wed d£sas~rsc. In fact, there exisb no such discretionary power; rather, the Hoard's jurisdiction is limited to Its mandate under the RLA and to the Agreement involved to the dispute-- neiOser of which provides any such discovery right as imposed by the Board hers
Moreover, the couple of Awards upon which the Board retied for its discovery order both concern so altogether different Agreement, different facts, and a different crafts what is now ca&d the TCIJ.f
The only other Award cited by the Board involving a discovery order was TCU v. Norfolk & Western Railway, Public Law Board No. 4454, Award 27 j. That local Board's Award is also distinguishable from the present case. In Award 27, PLB 4454 stated that its order was "in conformance with the spec authority given to us by the parties as set forth In the agreement establishing this Board dated November Z, 1987 at 3, 1?." Obviously, PLB 4454 recognized the quicksand upon which it stood in ordering docamtent production, and felt it necessary to cite the special Agreement provision in order to justify its order. But there is certainly no such special contractual authority for the current Award under the 8MWB's Agreement, and absolutely no snob power to order discovery exists at the NRAB.
Both of the two Awards cited resulted from the Board's misunderstanding of the rule regarding the withholding of evidence. As explained in the Carrier Members' Dissent to Award 18447, quoting from 29 Am Jur 2d, Evidence §131:
Carrier Members' Dissent
Third
Dives
Award 363
Pup 3
What that rule means, in the context of the present case, is that the burden of proof rvnmhsW upon the Organization, first to produce substantial evidence as to the casual nears between the Claimant's furlough and the particular contracting incident, and Jkft to produce substantial evidence to jusft questioning the efficacy of the R-I Reports offered by the Carrier. But in fleet the Organization never offered any evidence whatsoever to satisfy either of these ovideutiarx burdens.
White admitting "we have no reason to doubt the accuracy of the summary information provided (by the Carrier]," the Board requires the Carrier to effectively open Its books to prove this accuracy of the "Summary information"---improperly reversing the burden of proof to this case. Because the Organization bore the burdens of proof of its claim, the Boxrd~ if anything, should have required evidence trots the Organization to just* questioning the Carrier's documentary proof; after zit, the Carrier's "summary information" aomprisW official R-I Reports to the federal Surface Traasportation Board, as contemplated by PBD 229. Instead, the Board issued a broad discovery order allowing the Organization to launch a fishing expedition in run attempt to belatedly prove up its claim. Ira effect, the Board is allg the Organization to reopen the record-another assertion of the Board's alleged "discretion" that runs contrary to the roles and practices of the NRAB.
Failing! to address the issue placed before it, the Board compounds its error by generating new disputes, as to bow this vague new-found discovery right will be implemented. By not specifying what sort of records are covered by its order, the Board insures that there will be additional disputes as what constitutes the "source dotation" for the R-1 Reports-is it speaking of other summary compilations used to produce the R-1's, or is It boxcar loads of invoices and financial data that such a large corporation must surely generate over a year?
Beyond the extreme burden, if not outright impracticality, of implementing this order, we mutt also object that this Award requires the production of undefined information "for periods of leas than an aMUal reporting Periods" yet on the other hand the Board admits that "Article XV is silent with respect to the periods to be examined." Obviously, there is no contractual support, and therefore no jurisdictional bat* for this Award.
information more often than annually because New York Dock benefits are paid as a `monthly" allowance. But there are several flaw: in the Board's tbinldng. For one thing, tinier Mcubcrs' Ducat
as we AD know, even pure New York Dock benefits are not generally paid in the month accrued, but later-sometime: even months afterward. And under Article XV, the ratio is to be calculated from an average of l,[ budgets for a five-year base period--.snot Monthl expenditure=.
Moreover, Article XY only grants a New York Dock "level" of benefits; if it intended to apply all aspects of New York Dock, it would not have added the qualifier word, "level." Really, the Board has no grounds for assuming that the patties did not Intend for the payments to be made on a year-end bash, jest as some bonuses are paid after the end of the work season. In any event, the protection Award of Special Board of Adjustment No. 1087, BMWB v. Burlington Northern, had already diacreditad the Organization's moatblT-claim argument.
R-1 Reports, as a matter of public knowledge, are Bled on an annual basis. And Article XV originated in the PEB 229 proceedings, where the R-1 Report was the basis for developing the contracting ratio. In fact; Article XY placer me obligation on the Carrier to provide information to the Organization concerning its contracting, any more than the parties' Agreement on the property places any obligation on the Carrier to provide contracting information. It is late for the Organization to be arguing that monthly ratio reports are required. Indeed_ the fact that the Organisation waited years to request something more than the R-1 Reports b evidence that its negotiators understood the ansual bash for the ratio calculation.
?be Board's apparent desim.to unilaterally shorten the period for asoertalaing New York Dock benefits Is without any support under Article XV, as the Board itself admits; consequently, the Board is engaging in impermissible contract drafting when It presumes to imply a less-than-annual basis for the ratio calculation. Although the Board openly professed that it was not touching the merits of the claim in this Award, ordering the Carrier to produce records on a more frequent reporting basis telegraphs the Board's intent to arbitrarily revise Article XV.
Apparently, tire Board derided that Article XV is not sufficiently meaningful is its provisions, and has undertaken to cure its perceived shortcomings by means of the Board's own arbitrary flat. But it is ironic that the Board did not follow the advice of one of its own authorities cited approvingly is this Award, Third Division Award 32861, which held:
The fact that the Board is acting as an unauthorized contract mediator, Jnrstead of Its statutorily mandated rote of arbitrator, is further suggested In the Board' confession that it hart no idea whether the Carrier maintains the undelned "source documents" as a monthly basics or dot. Obviously, the Board would not know whether the numerous other railroads that art signatories to Article XV keep such records on a monthly basis either. So by indulging in such ad hoc discovery orders, the Board departs ffrom the national uniformity intended by Article VV of the 1996 National Agreement; and thereby reveals Its contractually unsupported decision to be arbitrary and capricious.
Besides exceeding its Jurisdiction, the Board grievously erred in neglecting to adjudicate this claim on the merits. The Board's failure Is conceded in its own words: "We decide no, other issues aside from those discussed concerning tine providing of ioformatiou..
to neglecting to rule on true merits, and instead Issuing this radical discovery order, the Board has indicated that 1t V more interested in opening the railroad industry's books than in resolving the particular dispute before the Board. But the Board was not appointed to be the part' mediator, or to serve as a master for discovery proceedings; rather, tine Board was appointed as adjudicator to resolve tine parties' dispute with finality--and that statutory mandate under the Railway Labor Act is what tile Board utterly failed to carry out:
The Board indicated that its discovery order is intended to determine whether the Carrier exceeded the ratio under Article XY. But before the Board could properly event consider that issue, it first needed to rule on the threshold issue of whether or not the Claimant had boon furloughed as a "direct result" of the particular contracting incident that was the subject of the claim. "that was the Organization's Initial burden as expressly stipulated in Article XY. Bat the record contains no evidence whatsoever that the Claimant's furlough was related to any contracting -in fact, the Claimant was simply in his regular seasonal furlough, long beforv the contracting incident in question. Tile ,Board therefore should have denied this clabu, due to the Organization's failure to establish an evidentiary carnal nexus between the Claimant's furlough and the incident of contracting.
Under the plain language of Article XV, without ruling on the thresh "direct result" kswe In this dispute; the Board was is no position to worry about the contrXctfW ratio issue. But even Wit hard found in the affirmative on the threshold issue of evidentiary nexus, the Board still Iacked the authority to order the discovery, for the reasons mentioned above.
In addition -to the Board's serious failings described above, it is evident that the Board has prejudiced the Carrier's rights in other ways. For example, the Board noted the issue concerning the Stampede Pass project; but the Organization did not raise that matter during its handling of this claim on the property; instead, the Organization meety argued about it in its Submission Although the Board opined that the Stampede page issue is "presently" moot, the Board implied that it would consider this matter upon remand after completion of discovery. Carries Umben' Discaat
Besides the objectionable legal and practical consequences of this Award, we believe that if i#s descent Into mulct-stage arbitration were to be adopted by other arbltmtom it would place an unsustainable burden on National Mediation Board resources, and also result in protraction of disputes. And such a result would surely drat the intent of the Railway Labor Act "to provide for the prompt and orderly settlement of ag disputm"t Clearly, the implications of this Award are intolerable, and not just to the railroad industry.
Burdened by such palpable errors as described above, Award 36983 cannot be considered as having any validity or precedence value.
LABOR MEMBER'S RESPONSE
While the Carrier Member's Dissent runs for nearly six (6) pages, the single theme that emerges throughout is that BNSF desperately desires to avoid making its records available for art objectively verifiable audit required to enforce the terms of a collective agreement voluntarily entered iota by the parties. Indeed, it is difficult to imagine another industry where advocates would publicly complain that objectively verifiable accounting would "have a mischievous and onerous impact" with "objectionable legal and practical consequences". The simple troth is that Article XV is essentially meaningless without timely and objectively verifiable accounting and a fair reading of BNSF's effort to thwart timely transparency leads to the conclusion that BNSF is either attempting to undermine Article XV or prevent the disclosure of suspect accounting practices. Whatever BNSF's motive, the inexorable conclusion is that the excuses advanced by the Carrier Members to support BNSF's continued obfuscation are largely recycled from BNSF's submission and have already been tacitly or explicitly rejected by the Board.
The Carrier Members Have
Misstated The Threshold Issue
In an apparent effort to avail having the question of BNSF's accounting methodology and timeliness even considered, the Carrier Members open their dissent by misstating the threshold issue. Contrary to the Carrier Members' assertion, the threshold issue is not whether the Claimant was furloughed as the direct result of subcontracting. Rather, pursuant to the plain language in the fast sentence of Article XV, the threshold issue is whether the amount of subcontracting on a carrier, measured by the ratio of adjusted Engineering Department purchased services (such services reduced by casts not related to contracting) to the total Engineering Department budget for the five-year period 1992-1996, has increased. Consequently, the Majority correctly issued a procedural ruling that the Carrier was required to allow the Organization to review the source data necessary to determine if, as a threshold issue, subcontracting had increased above the 1992-1996 base period.
The Corner Members are also wrong when they state that, "En]owhere in its claim has the Organization requested a right of discovery of documents ***". Contrary thereto, the Organization repeatedly requested the relevant data far bath the base period and subsequent periods, including requests made in letters dated January 24, 199? (Employes' Exhibit "A-3"), April 4, 1997 (Employer' Exhibit "A-4") and specify requests for monthly data in a letter dated August 6, 1997 (Employer' Exhibit "A-5"). Instead of producing the requested data and supporting documents,
the Carrier continued to assert, as an affirmative defense, that subcontracting had not increased over the base period. At that point, the Majority could very well have sustained the claim based on the adverse inference principle as was done by the Board in the conceptually similar dispute decided by Third Division Award 31879. This principle is so well established that it is addressed in the Hill and Sinicropi hornbook where they state, "[a]n arbitrator may likewise resolve and issue against a party that refuses a request for relevant information." However, instead of simply sustaining the claim, as urged by the Organization, the Majority bent over backwards to be fair and afforded the Carrier an additional opportunity to support its affirmative defense. The Carrier simply has no cause to complain, unless its real motive is to avoid a timely and objective evaluation of its accounting methods and practices.
The Summary Information
In The R-I Reports
Is Wholly Insufficient
The Carrier's attempt to rely on its R-I Reports to satisfy its obligations under Article XV is wholly insufficient for at least four (4) reasons. First, the Carrier Members' assertion that the R- I Reports were, "*** apparently good enough for PEB 229 when it fashioned Article XV. ***", is patently wrong. Neither the Report of PEB 229 or Article XV say one word about R-1 Reports. The truth is that the Carrier made reference to R-1 Reports in its presentation to PEB 229, but the PEB did not see fit to reference the R-1 Reports in its recommendations and the parties did not reference R-1 Reports when they adopted those recommendations as Article XV. Moreover, at least one of the budget categories the parties did reference in Article XV - - "adjusted Engineering Department services" -- is not an R-1 reporting category.
Second, the ratios contemplated by Article XV can not possibly be based upon R- I Reports because Article XV applies to all carriers that were signatory to the September 29, 1996 National Agreement, including many small carriers that are not required to file R-1 Reports arid do not file such reports.
Third, relying on R-1 Reports to calculate Article XV ratios would render Article XV meaningless as a procedural matter. The national claim and grievance handling rule (BNSF Rule 42) requires all claims to be presented within sixty (60) days from the date of the occurrence on which the claim is based. If an employe was furloughed during January of 2004, using R-1's to calculate the Article XV ratio would make it impossible to determine if the employe had a basis for filing a claim until April of 2005 because annual R-i Reports are not required to be filed until March 31 ' of the following year. In other words, by the time the R-1 Reports for 2004 were published, not only the initial sixty (60) day time limit, but the time limits for the entire appeal process, would have expired. Simply put, using R-1 Reports to calculate Article XV ratios would mean that the time limits to file and appeal a claim would expire in most cases before the threshold issue on which the claim must necessarily be based (whether subcontracting had
increased) could be determined and would make any remedy ultimately due to the employe's paid years after the employe suffered the harm protected by Article XV.
Fourth, relying on R- I Reports to calculate Article XV ratios would undermine Article XV as a practical matter. That is, the obvious purpose of Article XV is to provide employes with a New York Dock derived protection during their protective period. As explained above, if an employe was furloughed as a result of subcontracting in January 2004 and R-1 Reports were used to calculate Article XV ratios, it would not be possible to determine if the employe was entitled to benefits until at least April of the following year. Hence, some fifteen (15) months of the employes' six (6) year protective period would pass without the receipt of the benefits to which he was contractually entitled. Delaying the payment of such benefits undermines their very purpose which is to provide compensation when the employe needs it most, i.e., during periods of furlough or reduced compensation.
Monthly Reporting Is
Essential For The
Application Of Article XV
Contrary to the Carrier Members' assertions, monthly reporting of total Engineering Department budgets and adjusted Engineering Department purchased services, rather than annual reporting, is essential for the application of Article XV for at least two (2) reasons. First, monthly reporting of this data allows a furloughed employe to determine whether or not the threshold increase in subcontracting has occurred by examining the budget numbers for the twelve (12) months immediately preceding a month in which he is in furloughed status as a result of subcontracting. This is the only reasonable way to determine if subcontracting has increased above the base period as contemplated by Article XV because it measures the subcontracting that occurred in the 12 month period preceding the date the employe alleges his furloughed status resulted from the Carrier's increase in subcontracting Maintenance of Way work, rather than measuring subcontracting that occurs during an arbitrary calendar year period that may include reported months long after the employe was placed in furlough status as a result of the carrier's increase in subcontracting.
Second, in addition to allowing the measurement of subcontracting during a relevant period, the monthly reporting of the relevant budget data allows employes to determine if they were furloughed as a direct result of contracting. Clearly, if an employe is furloughed and a carrier contracts out work that he is capable of performing during that time, the employe is furloughed as a direct result of subcontracting. However, an employe may also be furloughed as a direct result of subcontracting if, during the twelve (12) months preceding a month in which he is furloughed, the carrier contracted out work that could have been rescheduled and performed by the employe instead of furloughing the employe. In other words, monthly reporting is essential both for determining if subcontracting has increased and for definitively determining if an employe is furloughed as a direct result of subcontracting.
New York Dock "Level"
Of Benefits Means A11
Benefits Provided By New
York Dock Conditions
The Carrier Members are simply wrong when they assert that the word "level" in the phrase "New York Dock level of protection for a dismissed employee" is a "qualifier" meant to limit the benefits provided by Article XV. The New York Dock Conditions provide a specific level of benefits required by federal law in various "transactions" subject to the jurisdiction of the Surface Transportation Board and the use of the word "level" in Article XY simply conveys that precisely the same benefits are provided under Article XV by contract.
It is simply unreasonable to conclude that either PEB 229 or the parties somehow intended to limit the plain language of Article XV that "any employe covered by this Agreement who is furloughed as a direct result of such increased subcontracting shall be provided New York Dock level protection for a dismissed employe, subject to the responsibilities associated with such protection" to mean something other than full New York Dock dismissal allowance benefits for such an employe. The oily reasonable interpretation is that Article XV means just what it says. Adversely affected employes are entitled to a dismissal allowance calculated pursuant to Article I, Section 6 of New York Dock and are contractually entitled to receive that allowance for the duration of their "protective period" as also defined in New York Dock. Additional benefits, such as conversion of the dismissal allowance to a displacement allowance as provided in Section 6 if the employe returns to service with the Carrier, may apply under specified circumstances and are defined by the various additional sections of New York Dock that, by their plain terms, apply to dismissed employes (see Employes' Exhibit "C" to Docket MW-36035).
The Board Did Not
Exceed Its Jurisdiction
Pursuant to Section 3 First (i) of the Railway Labor Act, the Board has jurisdiction over, `the interpretation or application of agreements concerning rates of pay, rules, or working conditions ***" Article XV speaks in general terms about a method for measuring subcontracting and, in this case, the Board has done nothing more than to interpret Article XV and issue a procedural ruling to aid in its application and resolution of the parties' disputes over its meaning. Contrary to the Carrier Members' assertions, the Board's initial finding will not result in a protraction of disputes or place an unsustainable burden on National Mediation Board resources. Rather, the carefully crafted findings of the Majority, coupled with the jurisdiction retained by the Board, will result in a definitive interpretation and application of Article XV that should guide the parties nationally and result in a significant diminution in the number of disputes.
Award 36983 could hardly have been reasoned or written more clearly. If future readers
accept the inexorable logic that the precedential value of an award is proportionate to the clarity
of reasoning in the award, then Award 369$3 will indeed carry powerful precedential value,
NATIONAL RAILROAD ADJUSTMENT BOARD
THIRD DIVISION
Page 3 Serial No. 401
Page 4 Serial No. 401
Page 5 Serial No. 401The Carrier therefore seeks an advisory opinion from the Board - ". . . BNSF seeks a ruling as to whether these Awards directing discovery/document production would be satisfied if... [and] BNSF respectfully requests an interpretation/clarification of these Awards and specifically requests that the Board state that if the information stated above is provided, such production will satisfy the requirements of the abovereferenced awards." (Emphasis added.) The Board does not give advisory opinions based on hypothetical situations.
We return to the holding in Third Division Award 36983. We simply held that because the Carrier took the position that the Organization did not provide "supporting evidence" to support its claim - which evidence was solely within the Carrier's control - and then refused the Organization's requests to see that supporting evidence - that the Carrier was obligated to permit the Organization to see that evidence. The Board also pointed out that "jajlthough we have the discretion to do so, because we believe that the Carrier acted in good faith and because we are advised that this is the first dispute under this language to reach this level, we shall not presently sustain the claim on its merits because the Carrier did not provide the requested information."
The Board has no intention to give advisory opinions based on hypothetical situations or in any way to micromanage the disclosure of information ·n this case. The Carrier placed itself in this position because it made the argument that the claims should be denied because the Organization did not have "supporting evidence" which only the Carrier had, and then refused to allow the Organization to see that evidence. As pointed out above and as further discussed in Third Division Award 36983, because the Carrier took that position we had the discretion to sustain the claim. However, because of the ramifications of what this case means to the parties and to the industry, when we issued the Awards we chose not to do so. The obligation is on the Carrier to produce the required information. The obligation is on the parties - and not the Board - to set up procedures for the production of that Information and to agree upon further procedures to protect the confidentiality of the Carrier's records. The parties are also free through the negotiation process to come up with something completely different that will resolve these particular disputes or contracting disputes in general. Should that not be accomplished, then these disputes can be returned to the Board. The Board will then decide whether the requirements specified in Third Division Award 36983 have been met and, if they are not met, whether to sustain the claims. If we are of the opinion that the Carrier met its obligations, we will then address the merits of the underlying claims. The Board will not, however, give an advisory opinion that if the
Page 6 Serial No. 401Carrier takes certain action then it will be in compliance with the requirements specified in Third Division Award 36983.
The Carrier's request for interpretation/clarification is denied. The parties shall have 60 days from the date of this Interpretation (or to a mutually agreed upon date) to advise the Board of the status of the Carrier's compliance with the requirements of these Awards.
Referee Edwin H. Benn sat with the Division as a Member when Awards 36983 and 36984 were rendered, and also participated with the Division in making this Interpretation.
NATIONAL RAILROAD ADJUSTMENT BOARD
THIRD DIVISION
Page 3 Serial No. 403documents, procedures and conditions to be met and followed before it was willing to produce documents to the Organization. On June 23, 2005, in Interpretation No. 1 to Awards 36983 and 36984, the Board denied the Carrier's request for interpretation/clarification. In pertinent part, the Board held:
information ...." as directed in Third Division Award 36983. The Organization now asks the Board to sustain the claims.
In Interpretation No. l to Awards 36983 and 36984, ive stated that "[t]his Board has no intention to... in any way to micromanage the disclosure of information in this case." That is what we are now being asked to do. We decline the invitation to decide which confidentiality agreement should be signed. That was up to the parties to work out, which they were unable to accomplish. The parties attempted in what we deem to be absolute good faith to reach agreement on the types of information to be provided and procedures for production of information in order for the Carrier to comply with the requirements of Awards 36983 and 36984. However, their efforts resulted in impasse and no information has been produced by the Carrier.
But the bottom line here is that in Award 36983, rather than immediately sustaining the claim because the Carrier took the position that the Organization did not provide the supporting evidence for the claim and then refused the Organization's requests for access to that information, which was solely in control of the Carrier, we gave the Carrier the opportunity to provide the information to the Organization. Nevertheless, the Board held:
That opportunity was given more than two years ago and, to this day, no information has been given by the Carrier to the Organization. Given the Carrier's original position in this dispute that the claims should be denied because the Organization did not provide the supporting evidence for the claims and then refused the Organization's requests for access to that information, which was solely in control of the Carrier, it is now appropriate to draw the negative inference that had the Carrier produced the information sought by the Organization, that information would have supported the Organization's position. See Third Division Awards 18447, 31879 and Public Law Board No. 4454, Award 27 (supplemental) quoted in Award 36983. Again, in Award 36983 we clearly, held that "Is]hould the Carrier fail to make that source information available, we i,ili sustain the claim." The Carrier has not done so. The Page 6 Serial No. 403
claim will therefore now be sustained. As a remedy, the Claimants shall be made whole in accord with the provisions of Article XV.
Referee Edwin H. Benn who sat with the Division as a neutral member when Award 36983 was adopted, also participated with the Division in making this Interpretation.
CARRIER MEMBERS' DISSENT
TO
INTERPRETATION NOS. 1 AND 2
(SERIAL NOS. 401, 443 AND 404)
TO
THIRD DIVISION AWARD 36983 (DOCKET MW-36035)
AND
THIRD DIVISION AWARD 36984 (DOCKET MW-36053)
(Referee Edwin H. Benn)
This is further dissent to Awards 36983 and 36984, as well as to the two Interpretations issued by the Board for each of those Awards. Our previous dissent to the original Awards is incorporated herein by reference.
Awards 36983 and 36984 constituted a discovery order; the Board acknowledged that it was not ruling on the merits of the claims. Interpretation No. 1 (Serial No. 401) amounts to a decision-avoidance tactic on the part of the Board, inasmuch as the Carrier was basically offering what records it had available, provided that the Organization signed an effective confidentiality agreement. But contrary to the Board's assertion in that decision, there was nothing "hypothetical" about the Carrier's offer of documents, because-as the Carrier pointed out in its Submission for Interpretation-the Carrier was offering all that could have been required under standards of law. Interpretation Nos. 2 (Serial Nos. 403 and 404) are the first true rulings on the merits of these cases.
Unfortunately, Serial Nos. 403 and 404 are more accurately termed a "catch 22," as opposed to rulings on the merits. We say that because, while in both the original Awards and in Serial No. 401 the Board recognized the C'arrier's right to a means of protecting the confidentiality of those records from disclosure to third parties, the Board nevertheless in its Interpretation Nos. 2 effectively defeated that right. It is incomprehensible how the Board can on one hand recognize the legitimacy of the Carrier's requiring a confidentiality agreement from the Organization, and yet issue Awards that allow the Organization to argue that the Carrier will hereafter have to pay by default thousands of future Article XV claims, because the Organization refuses to sign a bona fide confidentiality agreement.
In the Board's own words, the premise for Serial No. 401 was to direct the parties ". . . to set up procedures for the production of that information and to agree upon further procedures to protect the confidentiality of the Carrier's records," and the Board also said that both parties had an "obligation" to satisfy that directive.1 Yet although the Board was willing to claim authority to issue an unprecedented
discovery order, it is strangely unwilling to demonstrate comparable authority to fairly enforce that order so as to protect the Carrier's right to confidentiality of those proprietary records.
Serial Nos. 403 and 404 reflect that the Board has no reason to doubt the good faith of the Carrier as to the form of its confidentiality agreement, nor in its negotiations efforts with the Organization in attempting to procure the organization's signature. And during the Referee Hearing on the request for Interpretation Nos. 2, the Carrier Member heard no persuasive reason why the Organization refused to sign the Carrier's confidentiality agreement. As the Board will recall, the Organization admitted both in its Submission for Interpretation No. 1 (Serial No. 401) and in its oral argument before the Board that it indeed intended to avoid financial liability for disclosures of the protected information.
During the Referee Hearing on Interpretation Nos. 2, the Organization spent most of its time on this subject arguing that it did not want its officers and agents personally liable for violations of the confidentiality agreement. But obviously damages liability is precisely what makes a confidentiality agreement effective; and individual liability is all the more necessary for effectiveness as to an association like the Organization. And certainly the Organization has shown a tendency to ignore confidentiality in the past--for example, referring, in Submissions to the Board, to claims settlements that the Organization had previously agreed would be n on refera ble.
The confidentiality agreement that the Carrier proposed to the Organization contained rather standard language for such instruments. But the Organization's draft form was both non-standard and legally insufficient to protect the Carrier's confidentiality rights for several reasons, which the Carrier outlined in its Submission for Interpretation Nos, 2. For example, the Organization's version proposed to deprive the Carrier of money damages in the event the Organization or its agents breached the agreement. If one compares the Organization's unreasonable proposal with confidentiality forms commonly used in the transportation industry (e.g., the standard ALPA form for the airline industry, which is also governed by the Railway Labor Act) one does not see the labor organization exempted from money damages liability.
Such an illusory form as that counter-proposed by the Organization is particularly dangerous to the industry with respect to securities regulation issues, as CABER MEMBERS' DISSENT TO
the Carrier argued in its Interpretation Submissions. (The standard ALPA confidentiality agreement form ja copy of which is attached] expressly acknowledges that danger.) If, in order to comply with the Awards, the Carrier were to accept an ineffective confidentiality agreement such as the Organization proposed, then the Carrier risks exposing itself to the consequences of a possible disclosure to third parties, contrary to the intent of securities regulations. In producing that legal dilemma, the Board stepped beyond its authority.
At the Referee Hearing, the Organization failed to prove that there is anything unreasonable about the language of the Carrier's proposed confidentiality agreement.2 Indeed, there is no justification for the Organization's not signing it as a prerequisite to its access to this proprietary data. Appallingly, the Board rewarded the Organization for its bad faith intransigence by sustaining these claims, despite the fact that it was the Organization-not the Carrier-that thwarted the discovery process ordered in Awards 36983 and 36984. Clearly, the Board's decision to sustain these claims is arbitrary, capricious, and legally insupportable.
In its Submission and during its presentation at the Referee Hearing, the Carrier reminded the Board that there commonly are adverse consequences for a party's willful failure to cooperate in discovery proceedings. The Carrier cited, in its Submission for Interpretation Nos. 2, some Awards that provide precedent for the Board to dismiss the claim where the Organization fails to cooperate or refuses to sign an appropriate Carrier-provided agreement (e.g. Public Law Board No. 4768, Award 6 involving the parties to this dispute; and Third Division Award 36420).
Moreover, the Carrier noted that in court cases, a plaintiff's claims may be dismissed if the plaintiff fails to cooperate with the defendant in the discovery process. By way of illustration, we cite various court decisions in the Fifth Circuit, which is where the Carrier's headquarters are located, that require dismissal of claims by a non-cooperative plaintiff. See, e.g. Butler v. Cloud, 104 Fed. Appx. 373, 374 (5th Cir. 2004) (affirming dismissal of plaintiffs claims with prejudice for failure to comply with discovery obligations, quoting Griffin v. Aluminum Co. of America, 564 F.2d 1171, 1172 (5th Cir. 1977); Wright v. Robinson, 113 Fed. Appx.
1 The only unusual provision in the proposed agreement was that specifically barring use of these confidential records before a Presidential Emergency Board, which provision was necessitated by the Organization's early admission that it intended to use it for that purpose. CARRIER MEMBERS' DISSENT TO
12, 16 (5th Cir. 2004); In re Liquid Carbonic Truck Drivers Chemical Poisoning Litigation, etc., 580 F.2d 819, 823 (5th Cir. 1978); Smith v. Hertz Equip. Rental, 2002 U.S. Dist. LEXIS 131, *1 (N.D. Tex. Jan. 4, 2002); Gist v. Lugo, 165 F.R.D. 474, 478 (E.D. Tex. 1996); Wright v. Robinson, 113 Fed. Appx. 12, 16 (5th Cir. 2004) (affirming the dismissal of plaintiffs case with prejudice where plaintiff "failed to cooperate in the discovery process").
A few representative samples from other Circuits include: Technology Recycling Corp. v. City of Taylor, 186 Fed. Appx. 624, 640 (6th Cir. 2006); Everyday Learning Corp. v. Larson, 242 F.3d 815, 817 (8th Cir. 2001); Bobal v. Rensselaer Polytechnic Institute, 916 F.2d 759, 765 (2d Cir. 1990) (sustaining dismissal as sanction for plaintiffs unwillingness to cooperate with discovery as ordered by the court); Floyd v. Mount Sinai Medical Center Personnel Director, 2006 U.S. Dist. LEXIS 81715, *19 (S.D.N.Y. Nov. 8, 2006).
During arguments, the Carrier asked the Board to be even-handed, and hold the Organization accountable for its non-cooperation. In the absence of any good reason to question the form of the confidentiality agreement, it would have been fair that any sanctions should have fallen upon the Organization, not upon the Carrier. The Carrier made good faith efforts to comply with the Board's discovery orderyet it was the Carrier whom the Board unjustly punished. In that Injustice, the Board is sending a signal that employers have no effective means of protecting confidential information; their only alternative is to pay the claims as blackmail.
Nobody asked the Board to "rnicromanage" the discovery process that it ordered. But with the order comes the responsibility to enforce its intent and integrity. By rewarding the Organization for its predictable refusal to sign any effective confidentiality agreement, the Board abdicated its responsibility, and consequently imperils the legitimate proprietary interests of every employer in this industry. As a practical matter, the effect of these Awards is to deprive the Carrier of its legal right to protect its confidential information. This is a substantive issue that resonates throughout the industry. Indeed, the Organization's evident objective is not only to open the books of every railroad company, but to establish a precedent for coercing every railroad into divulging its confidential financial information without the adequate protection of a fully effective non-disclosure agreement.
CABER MEMBERS' DISSENT TOThe fact that the Board's previous Awards ordered discovery with an acknowledgement of the need to protect the Carrier's confidential information, and then essentially condoned the Organization's violation of the intent of the previous Awards, unmasks these Awards as arbitrary and capricious. Furthermore, by interfering with the Carrier's lawful right to protect its confdential information, the Board clearly exceeded its authority.
Leading to the travesty of these Awards was the Board's fundamental error in refusing to recognize that tile Organization's motive in demanding these records was to use the confidential documents in proceedings before a third party, a Presidential Emergency Board, in Section G proceedings, which are outside of the Board's jurisdiction. The Carrier emphasized that fact in its Submissions and in argument during the Referee Hearings--without any real dispute from the Organization. The Organization's real motive was underscored in its refusal to sign a confidentiality agreement that would have limited use of the information to resolution of these RLA Section 3 labor claims. The Board had authority only to consider the Section 3 claims, and should have rejected the Organization's excuse for not signing the confidentiality agreement for the reason that it also wanted to [Ise the data for Section ti purposes. By playing to the Organization's ulterior agenda, the Board consequently intruded into an RLA Section 6 area, which is outside of its authority.
Another serious error was for the Board to presume that it should write into Article XV language that the parties did not negotiate, such as what suffices for documentation of the calculation of the contracting ratio. If, as the Board already indicated in its initial Awards, Article XV is so poorly drafted that certain definitions and basic provisions are lacking, then the Board could offer no remedy beyond suggesting that the parties use the statutorily mandated Section 6 proceedings to produce a more enforceable Article XV. But it is not for the Board to re-write Article XV under the rubric of "interpreting" that agreement. Public Law Board No. 5191, Award 2 cogently explained the jurisdiction of boards of adjustment as follows:
NATIONAL RAILROAD ADJUSTMENT BOARD
THIRD DIVISION
Page 2 Serial Nos. 407 and 408
By letter dated June 23, 2004, the Carrier requested interpretation of the Awards seeking ". . . a ruling as to whether these Awards directing discovery/document production would be satisfied if..." and then listed information, documents, procedures and conditions to be met and followed before it was willing to produce documents to the Organization. On June 23, 2005, in Interpretation No. I to Award Nos. 36983 and 36984, the Board denied the Carrier's request for interpretation/clarification. In pertinent part, the Board held:
The Carrier sought judicial review of the Board's Awards. By Memorandum Opinion and Order dated November 16, 2007, Judge John McBryde of the United States District Court for the Northern District of Texas granted the Carrier's motion for summary judgment in BNSF Railway Company v. Brotherhood of Maintenance of Way Employes, 523 F.Supp.2d 498, vacating the Awards and finding, in pertinent part id. at 506 [citations omitted]:
The Organization appealed the District Court's vacating the Awards. In BNSF Railway Company v. Brotherhood of Maintenance of Way Employes, supra, 550 F.3d at 425429 the Fifth Circuit disagreed with the District Court's conclusion that the Board exceeded its jurisdiction with respect to the Carrier's refusal to produce the source documents and our drawing an adverse inference from the Carrier's failure to do so [citations and footnotes omitted]:
The NRAB consistently informed BNSF that it would draw an adverse inference if BNSF failed to comply with the Award. In the Award, the NRAB stated that `[s]hould the Carrier fail to make that source information available, we will sustain the claim.' This warning was explicit and unequivocal. In Interpretation No. 1, the NRAB stated:
`The obligation is on [BNSFI to produce the required information. The obligation is on the parties - and not the Board - to set up procedures for the production of that information and to agree upon further procedures to protect the confidentiality of [BNSF's] records. The parties are also free through the negotiation process to come up with something completely different that will resolve these particular disputes or contracting disputes in general. Should that not be accomplished, then these disputes can return to the Board. The Board will then decide whether the requirements specified in [the Award] have been met and, if they are not met, whether to sustain the claims.'
settle any concerns over confidentiality and that it was not the role of the NRAB to assist in protecting BNSF's business records. In its second request for interpretation, BNSF did not ask the NRAB to give a detailed explanation of the phrase `source documents.' Instead, it appears that BNSF understood what would constitute source documents for the 1992-1996 period because it was prepared to turn over these documents subject to a satisfactory confidentiality agreement. At this point, the primary dispute between the parties was the content of the confidentiality agreement and whether it would include money damages as a remedy, not which documents were `source documents.'
In its second request for interpretation, BNSF asserted that if it is required to turn over the source documents, then it `is entitled to require a non-disclosure agreement that will effectively protect its proprietary interest in this confidential financial information.' BNSF did not give a justification or citation for this generalization. Lost in the negotiations of the specific details of a confidentiality Page 10 Serial Nos. .I07 and 408
By order dated December 30, 2008, the District Court remanded the Awards to the Board ". . . for further consideration consistent with the opinion of the Fifth Circuit." Further argument was held before the Board on May 8, 2009.
By letter dated April 1, 2009, the Carrier advised the Organization that it ". . . will provide all relevant `source documentation' for the relevant time periods, in accordance with the Board's previous directives" and concluded that ". . . there is no longer any basis for an `adverse inference' against BNSF on that point." By letter dated April 30, 2009, the Organization responded that it ". . . believes that the recent document production is irrelevant to the issue remaining before the Board . . . the document production is too late . . . [tjhe Board . . . decided the issue as to whether contracting-out had increased by drawing an adverse inference against BNSF on that issue, and the Court of Appeals approved that part of the Board's decision." By Page 13 Serial Nos. 407 and 408
letter dated May 4, 2009, the Carrier stated that "[b]ecause the Fifth Circuit affirmed the district court's order vacating the awards, there is no existing Board award in this case . . . [t]he old awards have been and remain vacated. . . BNSF's position is that the Board need not and should not reinstate its adverse inference finding . . . [r]ather, it now can and should decide - in light of the railroad's production of the `source documents' - whether the subcontracting ratio has in fact been exceeded." The Organization responded by letter dated May 5, 2009 that it ". . . disagrees that the case is now a blank slate . . . [t]he only error found by the Court of Appeals was the sustaining of the claims in the absence of ruling on the causation issue.. . [t]hat does not mean that the entire cases are to be re-arbitrated . . . [and the] NRAB rules provide for arbitration based on the record developed on-the-property."
With respect to the scope of the present proceeding, the Organization is correct. Because the Carrier refused to produce the source documents for its defense to the claims, the Board - after giving the Carrier ample opportunity to produce those documents - drew an adverse inference. The Fifth Circuit clearly found that was proper - ". . . [t]hus, [the Board's] error was not in drawing the adverse inference - that was permissible - but rather it was in sustaining the claims based solely on that adverse inference without making a finding as to the causation element." 550 F.3d at 429. The Fifth Circuit then specifically remanded the case to the District Court ". . . with instructions to remand to the NR.AB for further consideration consistent with this opinion" (id at 430) which the District Court did in its December 30, 2008 order (". . . the awards . . . are . . . remanded to the National Railroad Adjustment Board, Third Division, for further consideration consistent with the opinion of the Fifth Circuit.").
We do not read the court opinions as a direction to the Board to start the proceedings anew. Indeed, if the Carrier's position is adopted to allow it to now produce the documents which it repeatedly refused to produce, then the court opinions will have effectively remanded this matter not to the Board, but to the parties on the property to assemble a new record - one which now contains the documents the Carrier initially refused to turn over. Clearly the courts did not do that. The Board drew an adverse inference from the record presented to it and developed on the property under the Board's rules and the Fifth Circuit affirmed our determination that an adverse inference could be drawn. As the Fifth Circuit clearly determined, the only question before the Board on remand is causation. The adverse inference remains. Page lit Serial No& 407 and 408
Because of the ramifications of this Award on the parties and the industry with respect to subcontracting for pending and future similar disputes, we will, however, address one aspect of the document production question. In Third Division Award 36983, we held:
Should this kind of dispute arise again between these parties, we now see no need for production to occur on less than an annual basis. That is because the Carrier represented to the Board at the argument on May 8, 2009 that it does not maintain less than annual records. We accept that representation. Further, as stated in Award 36983, our concern included the fact that ". . . furloughed employees and the Organization may have to wait up to one year until the Carrier provides its annual information when it files the R-1 Report for the employees and the Organization to know whether the employees are entitled to benefits under Article XV." Aside from postponing payment of benefits to those employees entitled to receive compensation called for in Article XV, that delay raised another potential Page 15 Serial Nos. 107 and 408
concern. That type of delay would have permitted an argument to be made by the Carrier that, depending on the passage of time from when employees are furloughed until the ratio information becomes available under Article XV, claims filed contesting the denial of benefits could be argued by the Carrier as being untimely filed under the Agreement because, after gaining access to the annual information, the actual furlough began at a time beyond the designated period for filing timely claims. For these parties, that is no longer an issue. The Carrier assured the Board at the argument on May 8, 2049 that it would not make such timeliness arguments. Again, we accept that representation. Barring any changes to those representations, less than production on annual basis will not be required for similar pending or future disputes between the parties.
There were four named Claimants in the original claims - R. D. Parkarinen covered by Third Division Award 36983 and B. A. Graves, G. G. Skogen and P D. Anderson covered by Third Division Award 36984. As noted in Award 36984, on November 27, 2000, Graves and the Carrier entered into a resolution in another dispute and Graves signed a settlement releasing the Carrier, which also covered this matter. As we found in Award 36984, "[t]he claim with respect to Claimant Graves is therefore dismissed." At the argument on May 8, 2009, the parties advised us that Parkarinen has now signed a similar settlement. Parkarinen's claim to entitlements is now dismissed from these proceedings. That leaves Skogen and Anderson as the Claimants.
The record shows that Skogen and Anderson were furloughed on November 8 and 18, 1998, respectively. There is no dispute to the Organization's position that Skogen and Anderson were qualified Welders.
The record also shows that the welding subcontractor, Chemetron, was performing welding for the Carrier prior to the date Skogen and Anderson were furloughed. In response to the individually filed claims on behalf of Skogen and Anderson, the Carrier stated in separate letters dated March 3, 1999, in pertinent part:
We return to the adverse inference found permissible by the Fifth Circuit. Again, according to the Court (550 F.3d at 424 [citation omitted]):
Under that rationale, the permissible adverse inference drawn as a result of the Carrier's refusal to produce the documents discussed in the prior Awards, Interpretations and court decisions is ". . . that subcontracting had increased . . . ." 550 F.3d at 424. In terms of Article XV, that specific adverse inference is that had the Carrier produced the documents requested of it, those documents would have shown that under Article XV, "[tlhe amount of subcontracting on a carrier, measured by the ratio of adjusted engineering department purchased services (such services reduced by costs not related to contracting) to the total engineering department budget for the five-year period 1992-1996 . . . " increased beyond the specified levels in Article XV. The Claimants performed welding work and were furloughed on November 8 and 18,1998. The subcontracting increased (pursuant to the adverse inference) and, as conceded by the Carrier in its letters quoted above, the Claimants were furloughed after the subcontractor (Chemetron) began working. Given the increase in subcontracting beyond the specified levels in Article XV found pursuant to the adverse inference, we therefore find that had the Carrier not brought in an outside contractor to perform the welding work, Skogen and Anderson would have been available to perform the work and would not have been subject to furlough while the subcontractor was performing that work. Simply put, had the Carrier not brought in the subcontractor, there would have been more welding work to be performed by the Carrier's employees - here, Skogen and Anderson. Because of the adverse inference which shows that the amount of subcontracting increased beyond the levels specified in Article XV and because the Carrier brought in Chemetron as a Page 18 Serial No& 407 and 408
subcontractor to perform the work prior to the Claimants being furloughed, we fmd that the furloughs of Skogen and Anderson were ". . . a direct result of such increased subcontracting . . ." which entitles them to the ". . . New York Dock level protection for a dismissed employee, subject to the responsibilities associated with such protection" as specified in Article XV.
Causation has been shown. We shall again partially sustain the claims. The remaining Claimants Skogen and Anderson shall be made whole in accord with the provisions of Article XV.
Referee Edwin Benn who sat with the Division as a neutral member when Awards 36983 and 369&4 as well as Interpretation Nos. I and 2 were adopted, also participated with the Division in making this Interpretation.