Form 1 NATIONAL RAILROAD ADJUSTMENT BOARD

THIRD DIVISION

Award No. 42189 Docket No. MW-41848 15-3-NRAB-00003-120155

The Third Division consisted of the regular members and in addition Referee Andria S. Knapp when award was rendered.

(Brotherhood of Maintenance of Way Employes Division ( IBT Rail Conference

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 (Nevada Railroad Material Company) to perform routine Maintenance of Way work of cleaning right of way of concrete ties and related work between Mile Posts 225 and 255 on the Kearney Subdivision beginning on October 8, 2010 and continuing (System File R-1052U-311/1544498).

(2) The Agreement was further violated when the Carrier failed to provide the General Chairman with an advance notice of its intent to contract out the aforesaid work and failed to make a good-faith effort to reduce the incidence of contracting out scope covered work and increase the use of its Maintenance of Way forces as required by Rule 52 and the December 11, 1981 Letter of Understanding.

(3) As a consequence of the violations referred to in Parts (1) and/or (2) above, Claimants D. Swane, K. Jenkins, K. Retzlaff, T. Deidel, R. Martin and S. Huerta shall now '. . . each be compensated for the lost opportunity to work, the same hours that the contractors' employees performed Maintenance of Way work, at the applicable overtime rates of pay.'"

FINDINGS:

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.

This case arose in October 2010, when employees of an outside contractor, Nevada Railroad Material Company, started removing old concrete railroad ties and performed other track cleaning work between Mile Posts 225 and 255 on the Kearney Subdivision. The work of the contractor's employees was coordinated with the work of System Gang 8566, which replaced the ties that the contractor removed. The Organization filed a claim on November 24, 2010, alleging that the work was traditional Maintenance of Way work subject to the notice provisions and limitations on contracting out set forth in Rule 52 of the Parties' Agreement. The Carrier responded that the ties were being removed pursuant to an "as is, where is" contract and the contractor was merely taking possession of its own property. Additionally, "as is, where is" contracts are not subject to Rule 52's notice provisions because the work is no longer scope covered.

Removing old railroad ties, hauling them away, and cleaning the track is traditional Maintenance of Way work, subject to Rule 52. "As is, where is" contracts are an exception, however: where the Carrier has sold its interest in used materials, the Board has recognized the right of a contractor to come onto the Carrier's premises to remove what is now the contractor's property, using its employees and equipment. Because the material no longer belongs to the Carrier, the work of removing it is not being done by the Carrier and is therefore no longer covered by the Scope Rule of the Parties' Agreement. Accordingly, Rule 52 no longer applies, and the Carrier need not provide notice of the work that the contractor is going to perform on its premises.

Where the Carrier asserts that work traditionally performed by its forces is not, in fact, subject to the terms of the Parties' Agreement because it has been removed from that contract by a superseding "as is, where is" contract, the burden of proof is on the Carrier to establish that defense.

The crux of this case is whether the work in dispute was performed pursuant to a legitimate "as is, where is" contract. During the on-property handling, the Organization asked for proof of the Carrier's assertion that the work was performed pursuant to an "as is, where is" contract. The Carrier submitted a two-page partial "Contract for Work or Services," which is part of the record before the Board.

There are a number of problems with the contract.

The biggest hurdle is that the contract is between the Carrier and "The Tie Yard of Omaha, Inc.," an entirely different entity from Nevada Railroad Materials, the contractor that performed the work in dispute. The Carrier did not explain the discrepancy or why a contract with a different party had any relevance to the dispute at hand.

Moreover, the contract is clearly denominated a "Contract for Work or Services," not a contract for the sale and removal of goods. The first two paragraphs of the contract, in Section 1, Nature and Location of the Work or Services, state:

"A. The work to be performed by the Contractor under this Agreement is to provide supervision, labor, operated equipment, materials, transportation, and permits to purchase, remove, and dispose of the Railroad's used ties . . . . All material released from projects during the terms of this agreement shall become the exclusive property of the Contractor at the time the materials are removed from the track structure.

B. The Work is more particularly described in Schedule of Billable Service Items, attached hereto . . ; the general specifications of the Railroad . . , attached hereto . . ; and the Terms & Conditions sheet . . , attached hereto and made a part hereof. (emphasis added)

One would expect a contract for the sale of goods - used ties - to be labeled and to read as such, not as a contract for services. The Carrier did not provide any of the attachments specified in Paragraph B. The implication of a "Schedule of Billable Service Items" is that the contractor is providing services for which the Carrier will pay. This conclusion is reinforced by the last sentence of Section 4, Paragraph B, relating to termination of the Agreement:

". . . . Upon termination, Railroad's sole obligation to Contractor shall be to pay for Work performed to the Railroad's satisfaction through the date of termination at the rates set forth in the Schedule of Values/Schedule of Billable Services Items. (emphasis added)

In addition, the contract provides for the Carrier to pay for the removal of the old ties, which do not become property of the contractor until after they have been removed. In other words, the contractor's employees are, in fact, being paid to remove what is still the Carrier's property.

The information provided by the Carrier raised a number of questions. When the Organization asked for further clarification and a copy of the complete contract, the Carrier refused to provide any additional information, citing confidentiality concerns. By doing so, the Carrier made it impossible for the Organization to fairly evaluate the Carrier's defense.

In light of the evidence in the record, the Board finds that the Carrier did not meet its burden to establish that the work performed by Nevada Railroad Material Company was accomplished pursuant to a legitimate "as is, where is" sale. Accordingly, the claim is sustained, and the Claimants are to be paid per the requested remedy in the claim.

AWARD

Claim sustained.

ORDER

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.

NATIONAL RAILROAD ADJUSTMENT BOARD By Order of Third Division

Dated at Chicago, Illinois, this 28th day of October 2015.