The Third Division consisted of the regular members and in addition Referee Michael D. Gordon when award was rendered.

"Claim of the System Committee of the Brotherhood that:

(1) The Carrier violated the Agreement when it assigned outside forces (Holland Welding) to perform Maintenance of Way work (rail end welding) between Glasgow, Montana, Mile Post 277.18 and Williston, North Dakota, Mile Post 121.1 beginning April 28 and continuing through May 28, 2003 (System File B-M1129-F/11-03-0255 BNR).

(2) The Agreement was further violated when the Carrier failed to provide the General Chairman with a proper notice of its intent to contract out the aforesaid work or make a good-faith effort to reduce the incidence of subcontracting and increase the use of its Maintenance of Way forces as required by Rule 55 and Appendix Y

(3) As a consequence of the violations referred to in Parts (1) and/or (2) above, Claimants D. Roebling, P. Najar, P. St George shall now each `receive equal and proportionate pay that the contract employes received. Pay is to be computed at the respective rates of pay. We further request that Claimants

The Third Division of the Adjustment Board, upon the whole record and all the evidence, finds that:

The carrier or carriers and the employee or employees involved in this dispute are respectively carrier and employee 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 were given due notice of hearing thereon.

The Carrier began in-track flash butt welding in 1983 when it subcontracted with the Holland Company which then had a monopoly on the process.' Holland used its own employees to run the machines. In 1985, the Carrier purchased one flash butt welder from Holland and manned it with BMWE-represented employees with maintenance and training provided by Holland. At the same time, the Carrier continued to lease Holland equipment with Holland employees pursuant to Holland's then policy that required leased equipment to be operated by its own employees.

Flash butt welding has advantages in application and durability over thermit and other older welding techniques. It applies electric resistance though a special welding head to fuse the end of one rail to forge two rails together without addition of filler material. In contrast, thermit welding ignites a foreign material placed in a void between two rails that, after cooling, is ground to specifications. The Carrier says a flash butt welder costs $1.9 million new plus $100,000/year for parts, is used six to eight months per year by rail gangs and lacks the newest advances available on leased equipment.

2 By 1994, the Carrier owned three in-track flash butt welders that were used year round on projects other than those performed by joint elimination gangs.

In 1994, Chemetron Railway Products began to offer flash butt in-track technology. The Carrier leased equipment and operators under Chemetron's policy requiring its equipment to be operated by Chemetron employees.

In 1995, at the Organization's urging, the Carrier attempted to negotiate leases with Holland and Chemetron that allowed Carrier forces to operate the leased equipment (perhaps under lessor supervision). Chemetron rejected the idea outright. Holland conditionally agreed provided BMWE-represented Operators agreed to remain with the machines for the rest of the season. The Organization did not accept the condition and filed a claim against the Carrier for subcontracted work in 1995 and each year thereafter.

As it had since at least 1994, the Carrier wrote the Organization on December 12, 2002, that it intended to outsource in-track electric flash butt welding during the upcoming work season. The Organization objected to the blanket nature of the notice. The parties met but were unable to reach a mutual understanding.

Given the long history of virtually identical annual disputes, the Carrier's broad December 12 description of its intended subcontracting adequately informed the Organization of its intent so as to allow the Organization to meaningfully respond to it. Therefore, the Organization's assertion, that the notice was deficient and in bad faith, lacks merit.

From April 28 through May 23, 2003, under subcontract with the Carrier, Holland used two of its employees to operate a Holland owned in-track flash butt welder to weld rail between Glasgow, Montana, MP 277.18 and Williston, North Dakota, MP 121.1. The two Holland employees each worked eight hours per day Monday through Friday.

Welding is included in the Agreement's Scope Rule and BMWE-represented employees customarily do welding and have done flash butt welding utilizing approximately six flash butt welding machines owned by the Carrier in 2003.

On March 22, 2005, the Board issued Third Division Award 37435 which, over the Organization's partial dissent, denied a 1998 claim identical in all material respects

to the present dispute. The Award held (1) subcontracting protections apply to work "customarily" performed by BMWE-represented employees; "exclusivity" is not the test; (2) BMWE-represented employees customarily perform rail welding utilizing various technologies, including in-track flash butt welders owned by the Carrier; however, (3) the 1998 subcontract conformed to Appendix Y and satisfied the "special equipment" exception in the Note to Rule 55 because (a) there was no proof the Carrier's flash butt equipment was idle or that subcontracted equipment was used in lieu of Carrier equipment; (b) the Carrier could not lease in-track flash butt welders unless operated by contractor employees; and, (c) the Carrier need not purchase this expensive special capital equipment for use by BMWE-represented employees.

Award 37435 is recent and soundly reasoned. Stability, consistency and predictability reinforce its authority. It should be followed unless and until there are subsequent significant changes in material circumstances.

The Organization argues (1) its members customarily perform welding; (2) times have changed and there is no longer a valid, good faith reason to subcontract flash butt welding to outsiders; (3) Award 37435 recognized each claim is fact specific and the Carrier may not indiscriminately subcontract welding work; and (4) necessary flash butt welding equipment was available for the Carrier from equipment it owned or readily could have purchased or leased from Chemetron and/or Holland.

The Carrier asserts (1) BMWE-represented employees have not exclusively operated flash butt welders; (2) it is not required to purchase flash butt welders; (3) any Board order requiring a purchase exceeds the Board's jurisdiction; and, in any event, (4) the subcontract fits the exception to the Note to Rule 55 because the equipment is special and unavailable for lease without contractor operators.

The key issue is whether sufficient proof of changes in material circumstances between 1998 and 2003 compel a different analysis and result that obtained in Award 37435. Since neither the Note to Rule 55 nor Appendix Y requires the Carrier to make substantial expenditures for specialized capital equipment, the more precise question is whether there is adequate proof the welding equipment could be leased for use by BMWE-represented employees.

(06-3-672)