In the :'.a !atter of Arbitration
Between
Baltimore & Ohio RR Company
Newburgh & South Shore a4ry Co.
and
Brotherhood of Maintenance of
'.lay Employees
United Steel Workers of America
File
Arbitrator
Hearing
Appearances
Post Hearing Briefs Received
Reply Briefs Received
Issues
ICC Finance Docket No. 30095
Jacob Seidenberg, Esquire
June 10, 1983 - Washi ngton,
D. C.
Baltimore & Ohio R.°.
W.C. Comiskev, Manager
of Labor Relations
Newburgh & South Shore 'Z
George E. Stein, General
Superintendent
Brotherhoof Of Maintenance
of Way Employees
John O
I
B. Clarke) Jr. ,
Esquire, Counsel
United Steel Workers of America
Mary-Win O'Brien, Esquire,
Counsel
July 19, 1983
July 27, 1983
(1) Does the Board, acting
pursuant to Article I, Section 4, of the New York Conditions, have the jurisdiction
to terminate the Schedule
Agreement of one group of employees
and
modify the Agreement of another arouo of employees, affected by a transaction?
(2) Does the purchasing Carrier
to recognize the re-employment
rights of furloughed employees
of the purchased carrier?
Background: This is an arbitration proceeding under Azticle
I, Section 4 of the New York Dock Conditions resulting from
the approval by the Interstate Commerce Commission of the pur
chase by the B&O RD of the property of the 1:ewburgh and South
Shore Railway, a property ovm ed by the U.S. Steel Corporation
and operating in the Cleveland, Ohio area.
The B&O stated that i t intended to operate the `T&SS as
part of its Cleveland Yard. The N&SS has six miles of main
line track and 16 maintenance of way employees on its roster.
Six were currently active, seven on furlough, two on disability leave, and one acting as a foreman but faith recall right.
The Carriers and the Organizations differ as to the proper application of the New York Dock Conditions to this accruisition as it pertains to the class and craft of maintenance of
way employees. On the B&O this class of employees are represented by the Brotherhood of Maintenance of I-Tay Employees and
on the N&SS they are represented by the United Steel Workers
of America.
On December 13, 1982 the Carrier filed an application
for approval of the sale which ICC approved on March 28, 1983,
subject to the employees receiving the employee protective conditions of the New York Dock case.
1Thi le the Carriers' application was pending before the
ICC, the Carrier initially served a notice on the requisite
Organization on January 5, 1983 to negotiate an implementing
agreement. The parties met on February 22, March 25, April 8
and April 15, 1983 but their negotiating ef=orts were unsuccess.Cul. The Carriers therea=ter served a joint notice on
the two Organizations that they intended to progress the di spute to arbitration under Article I, Sect=on 4. Because the
parties were unable to agree upon a neutral, they petitioned
the National Mediation Board to appoint one. On :,lay 6, 1983,
the NMB appointed the Undersigned to be the Neutral Member of
the Arbitration Board. After the initial hearing, the parties
requested, and were granted the privilege of filing post hearing and reply briefs.
The gravamen of the dispute arises from the B&O's =n
tention to
apply its existing BMW schedule agreement to those
employees from the N&SS whom it wanted to transfer to the B&O
as well as the dispute as to its New York Dock Conditions' responsibilities to the remaining N&SS employees.
In the course of the negotiations with the Organizations, the Carrier stated it would transfer to the B&O certain
Newburgh employees who were in active service at the date of
the sale, and dovetail these employees into the appropriate
B&O Akron East End Seniority District Roster, and place such
employees under the a&O-BWIC Agreement. The B&O stated that
it initially intended to establish four positions to be filled
by the transfer of N&SS employees to work, not only on the former N&SS property, but also on existing B&O property within the
present B&O seniority district.
The Organizations made a counter proposal whereby the
purchased _T&SS property would be operated as a separate seniorby district under the terms and conditions of the Acreemen t
between the N&SS and US?fA, with the employees on the N&SS who
currently possess seniority rights to ?T&SS maintenance of way
work, be given the first opportunity to fill the positions
established by the B&O as a result of the acguisi Lion of the
N&SS property.
The B&O stated that to dovetail rT&SS employees on the
B&O seniority roster, but still holding that N&SS employees
were operating under the N&SS Agreement, would make it virtually impossible to integrate the N&SS into its work force because of the difference in the work rules between the B&OBbNE Agreement and the N&SS-USIV~., Agreement. The B&O stressed
there were differences in the two agreements on matters such
as meal periods, overtime, entitlement to being held on duty
after regular relieving time, notice of a force reduction,
seniority rosters, qualification periods for promotion, time
limits for advertising vacancies,
and
length of probationary
periods.
Another major point of dispute between the parties was
the Carriers # position that under the Sales Agreement, the
B&O had the responsibility to assume the employment of N&SS
who were in active service, but had no responsibility to fur
loughed
r.&SS employees. The Organizations stated the B&O should
not
be
permitted to destroy the employment relationship which
the N&SS furloughed employees possessed as a result of their
collective bargaining agreement with their carrier. '"he Crganizations stressed the B&O
was in
error in maintaining that the
Organizations were seeking to determine size of the Carrier's
work force by insisting that the Organizations were r..aintaining that furloughed employees are entitled either to dismissal
or dis-olacement allowances under the New York Conditions. The
Organization stressed that they were only seeking a ruling
that furloughed employees are encompassed by the ICC protections imposed as a condition for its approval of the sale, as
being employees involved in the acquisition transaction.
The Carrier maintained that the only N&SS emplovees for
whom it has a
responsibility are those employees who would be
displaced or dismissed as a result of a transaction, and furloughed employees are not affected in this manner by said transaction.
In summary, conclusionary way, these were the major
points of dispute between the parties that prevented them from
agreeing upon an implementing agreement that would enable them
to ma%e a fair selection of forces.
The underlying cause of the dispute is the differing
interpretations which the parties invest. in Sections 2 and 4
of Article I of New York Dock Conditions.
These provisions state in part:
Article I, Section 2:
"The rates of pay, rules, working conditions and all
collective bargaining and other rights, privileges,
and benefits (including continuation of pension
"rights and benefits) of a railroad's employees under applicable laws and/or existing collective
bargaining agreements or otherwise shall be preserved unless changed by suture collective bargaining agreements or applicable statutes."
"4. Notice and Agreement or Decision - (a) Lach railroad contemplating a transaction which is subject to.
these conditions and may cause the dismissal or displacement of any employees, or rearrangement of forces, shall give at least ninety (90) days written notice of such intended transaction by posting a notice
on bulletin boards convenient to the interested employees of the railroad and by sending registered mail notice to the representatives of such interested employees. Such notice shall contain a full and adequate statement of the proposed changes to be effected by
each transaction including an estimate of the number of
employees of each class affected by the intended changes. Prior to consummation the parties shall negotiate
in the following manner.
"Within five (S) days from the date of receipt. of notice, at the request of either the railroad or representatives of such interested employees, a place shall
be selected to hold negotiations for the pur-oose of
reaching agreement with respect to application of the
terms and conditions of this appendix, and these negotiations shall commence immediately thereafter and continue for at least thirty (30) days. Each transaction
which may result in a dismissal or displacement of employees or rearrangement of forces, shall provide for
the selection of forces from al 1. employees involved on
a basis accented as appropriate for application in the
particular case and any assignment of employees made
necessary by the
transaction shall
be made on the basis
of an agreement or decision under this section 4. If
at the end of thirty (30) days there is a failure to
agree, either party to the dispute may submit it for the
adjustment in accordance with the following procedures:
N
Carrier's Position
The Carriers stress that Section 4 of article I vests in
the Arbitrator the authority to frame an implementing order
that will enable the B&O to apply its agreement with the B:17;TE
to those employees who transferred to the B&O.
stated in their application to the ICC they stressed that in
T' he Carrier
order to achieve desired economies there ,;ould be a consolidation and integration of N&SS facilities into the B&0 operation. The ICC recognized this fact in granting approval and
stated:
"B&O anticipates that by consolidating the Nei.,Tburgh
facilities with its own and attracting additional
business to its own system it will be able to overcome the losses suffered by Newburgh and increase
its annual net earnings by approximately $866,000."
The B&O added that the ICC also recognized that there
would be adverse effects as a result of the consolidation when
it states:
"There will be adverse effects upon employees as a
result .of this transaction. It is equally true, hour
ever, that there would be an even worse effect upon
Newburgh employees if it remained a separate entity
and, as it appears likely, ultimately had to cease
operations altogether as a result of continuing sub-
. stantial losses."
The Carrier stressed that both the !CC and the Carriers
envisioned that, as a result of the purchase of the N&SS, '-.here
would be a consolidation and integration of the Newburgh operations into the B&O property supervised by B&O management personnel. To accept the proposal of the Organizations would prevent the B&O from realizing the economies of operation which
was the basis upon which the B&O purchased the property.
The Carriers state that the Organizations are
advancing
a false premise when they seek to maintain the status quo on
the Newburgh property because the New York Dock Conditions prohibit in any way adverse effects of employees' right. The intent- of the New York Dock Conditions is not to main tai n the
stztus cma. The TCt cleal-ly recognised there would be adverse
effects on the employees when it approved the say a of the orooerty to the B&O, and operate the :T&SS property as a seozra to
entity i s contrary to the transaction as au thorized by the
ICC.
r"he Carrier maintains the contention of the Organizati ons is ? I1 `ounded that -Article I, Section 2, of ;he New Yor%
Conditions recruires the Arbitrator to rule that the existing
rules, seniority districts, seniority rosters must be maintai ned until the parties changed 'ahem by negotiations under
Sect=on 6 of the Railway Labor Act. The Organizations argue
that Section 2 prohibits an arbitrator front terminating the application of an existing agreement. The Carriers insist this
is a narrow and restrictive construction which the Organizations place on the 1.Tetr York Dock Conditions, when the parties
fail to agree upon an implementing. agreement, and it is contrary to the purpose and intent of the New York Dock: Conditions.
The ICC has recognized that transactions are made upon the expectations that there will be a more efficient use of the assets and the elimination of duplicate facilities. The Carriers
add that the purpose of New York Dock was to facilitate rather
than obstruct, the effectuation of such changes, although they
may cause dismissal or displacement of employees, or rearrangement of.forces. For this reason, the ICC provided in A-rticle
I, Section 4(a) means whereby an Arbitrator could resolve all
disputes pertaining to the selection and reassignment of =orces
when the parties were unable to resolve them by negotiations.
Th_e Carriers state the Organizations rely =or their
position on a series of arbitration awards starting with the
"i1&W Trilogy"
(I7&:,7,
IT -UTU-December 29, 1981 - Edwards), (iT&>>IT-RYA-December 30, 1981 - Sickles), (:1&IT-IT-BLB, February 1,
1982 - Zunas), followed by Southern Railway-Kentucky Terminal -
Brotherhood of Railway Signalmen, October 5, 1982 -Fredenberger.
The Carriers state the awards of these .Referees are in
serious error and they frustrate the very purpose for which
ICC imposes an expeditious procedure for resolving impasses that
arise out of a coordination or an acquisition. These decisions
prevent a full integration of operations, and thus deny the
Carriers the very purpose for which they sought tile coordi nation or acquisition.
The Carriers note that Article I, Section 2, did not appear in earlier protective conditions such as the I7ashington
Job Protection Agreement, or the Oklahoma, Burlington, 11Tew Orleans or Southern-Central of Georgia Conditions. It appears
for the first tine in the C-1 Appendix prescribed by the Secretary of Labor for those agreements whereby carriers discontinued their intercity rail passenger service which was assumed by
AMTRAK, while the railroads continued to operate. The purpose
of Appendix C-1 was to protect railroad employees who were adversely affected when passenger service was transferred to
Al-1R.Ad:. The Carriers note, however, whenever such employees
were employed by M.ITRAK and were no longer employees of the
railroads which had discontinued passenger service, they were
then covered by the A1-ITRAK Agreement and not that of their
former railroad. The Carriers emmhasize that Section 2 of
Appendix C-1 was not treated as granting portability to the
rules agreements of railroad employees after they became employees of AMTRAK.
The Carriers state
when
Congress passed Railroad Revitalization and Reform Act it amended the ICC Act (Section 5
[2][f]) to provide that, in protection cases, the
Commission
should issue mrovisions "no less orotective of the interests
of enplcyees than those heretofore pur scan t to this subdivision and those established pursuant to Section 405 of the Rail
Passenger Act." This meant that the ICC had to formulate protection conditions based on the New Orleans conditions as modified by Southern-Central of Georgia, together with the provisions of appendix C-1. Since the ICC found no parallel to Appendix C-1 in prior railroad protection provisions based on
prior Section 5(2)(a) proceedings, it accordingly, incorporated verbatim Appendix C-1 into Article I,
Section
2, when it issued the 27ew Yo=l: Dock Conditions to meet the Congressional
directive stated in the 4-R Act.
'?'he Carriers state that Section 2 has no antecedents in
any prior merger, accqui si tion, or "control" situations fashioned to meet requirements of a narticu? ar position. On the
contrary Section 2 was taken from Appendix C-1 that was designed to apply to cessation of passenger operations by a single
czri er, ':ut then it was incoruorated into clew York Doc% Conditions which applies only to cases involving comb_nations of two
or more carriers. ."ALT)-oendix C-1 was ~mended to apply to erployees who continued in service with their original railroad
employer. It teas applicable only to certain employees. Section
2 could not be expected to dispose of the question of agreement
application and preservation in transactions where a car=ier
accruires the assets of another carrier and the latter carrier
ceases to operate.
The Carrier states the parties have to rely on the Section 4 mechanism to take care of situations for determining questions relating to rearrangement of forces and interpretation of
terms and conditions of protective arrangements. The Carriers
maintain without Section 4 remedy, there could be no orderly resolution of the questions raised under Section 2. Arbitration
under these conditions is the mandatory remedy for questions
raised as to their meaning and application. There is no conflict between Section 2 read properly, and the principle that
questions relating to agreement application
should
be left to
the negotiation/arbitration process.
The Carriers assert that Section 4 provides for negotiation/arbi
-Lt..-
a Lion of all changes of employee impact effected by
a transaction. They add there is no language in Section 4 that
ma?:es an e:-ception for changes in agreement application because
o
A.
-ion 2. I-'~ the ICC had in-ended such
' the Provisions of Sect
L 4
an e::ception, it could 'nave easily so stated. Without such a
stated a;:ception i t should not be inferred.
The Carrier notes that the ICC stated in a proceeding
under the Short Line Conditions, which are virtually the sane
as the New York Dock, that the duty o= a referee is to render
a decision on every subject or issues discussed during the
parties' discussions. The ICC opinion stated the referee must
reconcile all disputes over which he has jurisdiction (Durango
& Silverton Narrow Guage RR Co. - June 3, 1982).
The Carriers added the ICC stated in BLB-L&O and MoPZF;January 4, 1982 that, whether employees are placed under the
collective bargaining agreement of the Carrier to which they
are transferred, is a proper issue for a neutral to determine
under the N&fB Conditions, which are similar to NY Dock except
they apply to a trackage agreement.
The Carriers maintain that although those arbitrators
who
stated they had no jurisdiction to terminate the application of an agreement, nevertheless, in every case, proceeded
to amend rights under the collective bargaining agreements,
when they dovetailed the seniority of
the
employees of the property being acquired into the seniority rosters of the purchasing carrier.
The Carriers state that those arbitrators who state they
have no jurisdiction under Section 2 to terminate application
of an agreement under Section 2, have misread
the purpose of this Section. They have read a limitation into
this Section which does not exist. They were not exercising
the full authority vested in them by Section 4. the Carriers
state Section 2, taken from ApcendiX C-1 evolving out of the
A:IT~Y. transactions was never intended in N'ew York Dock Conditions to weld a particular employee to an agreement so as to
prevent his transfer to another railroad employer or another
craft on the same railroad without carrying his former agreement with
him.
The ICC recognized that transactions of purchase
were likely to involve transfers of employees from one railroad
to another. Sec tCion 4 was the mechanism to handle disputes
a
rising out of such transfers.
The Carriers sta to the issue is not whether the Arbi trafor
has
the authority under New ,York Dock Conditions to terminate application of an Agreement, but rather rather the Arbitrator choses to exercise the authority. The Carrier notes
the Arbitrator chose to exercise the authority in the DetroitTerminal case to place the Detroit Terminal Yardmasters under
the Conrail Agreement. The Arbitrator in the Point Consolidations between the Southern and N&W found that yardmaster functions at Lynchburg could be consolidated under the Southern RR
Agreement and Yardmaster functions at Winston-Salem could be
under the N&S? working
conditions,
and that Yardmaster functions
at I-lorfolk could be consolidated under the RYA N&W (Virginia)
Agreement.
'The Carriers note another problem that would arise if
the :1&SS employees transferred to the B&L, were permitted to
retain their former collective bargaining agreement. The r1&SS
pr opertv will become B&O property. 'thus there will
different unions representing the class or cr a` t o=
ance of
17ay
employees on the B&O. This is contrary
provisions of the Railway Labor Act and the policy
which is to recognize a single organization as the
tive of the entire craft or class on a carrier.
The Carriers state there is no merit to the Organization's pos
tion t ha t the Carriers are es topped from contending that an
Arbitrator has the authority under Section 4 to terminate
the application of a collective bargaining agreement. The Or
ganize Lions s to to that because certain arbitrators -found
1-h
ey
do not have such au th ority, and since their awards were rend
ered before the Carriers filed their application with the ICCO,
the Organizations contend the Carriers were obligated to re
quest the ICC to rule on the issue. The Carriers note, first,
that not all arbitrators have ruled the same way on this is
sue. The Detroit Terminal and the Southern-Norfolk awards
were also rendered prior to the filing of their ICC applica
tion, so there is no consistent arbitral authority on the is
sue.
The Carriers also maintain, that in any event, they have
no obligation to ash the !CC to overrule arbi tral decisions
which weze not uniform. The Carriers assert that they stated
forthrightly in their application teat the E&O was going to integrate the N&SS senarate facilities into the 1 arger B&O system. It adds that the ICC recognized the pre.mises on which
now be t;:o
_ain Len
to the
or
the .`11I5,
repr esenta-
the B&0 intended to operate the Facilities and cave i is z:.nrova? thereto.
The Carriers charge that the Organizaticns, instead,
should be es~opped because they had the opportunity to state
their point of view to the ICC that the _-'&SS should be operated
as a separate entity but they chose not to, and i t i s they who
should be estopped.
The Carriers add that, because the !CC imposed the :few
York Dock Conditions without
modifying
arbitration decisions
on the subject, i t cannot be presumed that -he ICC codified
hese decisions and interpretations. The Carriers note that
the Commission has clearlv s fated its own in teraretati on of
these conditions in the Durango and BLE-L&:N and MOP cases, and
that is what governs.
The other major question that the Carriers' raise
that if the B&O's existing agreement with the Bi.%TE is to apply
to the ?7&SS employees who transfer to it, does that deny the
B&O the discretion as to the number of N&SS employees it will
orrer employment, and does it have to transfer to i t all of
the N&SS mainteance of way employees. The Carriers state in
their ICC application, and in their notice of Ja-nuary 5, 1983,
they only made reference to enployees i n the active service
of .the '4'&SS and did not refer to any other employees. 'fey
stress that since 27&SS furloughed employees cannot be dismissed
or displaced by the transaction, therefore, they are not entitled to any protection under ':Y Doc,% Conditions. The Car-
Tiers state the authority or a `_: eu t= al under Sect=on
A_-
does
not e::-L.-end to reviewing a carrier's daterminztion as to tire
size of the carrier's :1or'c force it
1.7ill
employ.
The Carriers state, by -,.:ay of rebuttal, 1--hat i t is aware of the different types of senaority provided for under
the B&O and ?1&SS rules. They maintain, however, t:zat once the
transaction is consu=ated, IT&SS employees ,oho transfer must
be put under a single collective bargaining agreement, i.e.,
the B&O Agreement, in order for the B&O to be able to integrate
these enpl ogees into the B&0 work force.
~`:e Carriers also deny that dovetailing I1&SS `m--)l ogees
onto B&O rosters will create problems of great magnitude. The
Carriers propose to dovetail Newburgh employees by their seniority date, ie., date of hire, into the B&O Trackmen Seniority Roster for the Akron East End Seniority District. Trackmen
seniority is the basic seniority for this class or craft. The
Carriers add that the r:&SS employees after the transfer could
then establish seniority in the promoted classifications on the
basis when they first qualified to perform service in this promoted classification as indicated by PT&SS records.
The Carriers reiterate that dovetailing seniority is a
fair and ecuitable method for merging rosters and stresses that
even those arbitrators, upon whoa the Organizations rely =or
support of their proposition that the Newburgh Agreement must
continue to govern 'Newburgh employees, have ruled that dovetailing seni o=i ty was a fair and ecrui table method of merging rosters.
The Ca=ri ers further state that if the B&O :gas r ecuired
to accept the Iran--f er, and enter into an employment rel a tion-
ship w_ it"', all P1&SS maintenance of way employees on the semi or
ity roster as of the day
o-42-
sale, the B&0 would incur substan
tial pension costs. The Carriers note the Sale Ag=eement be
ttveen 1_21',Ae parties protects the accrued pension bene=its of all
present i:&SS emplovees, but divides fur then respons ibi l i ties
for these employees between purchaser and seller depending on
which employees are in active service on the date the transac
tion is consummated. Under the Sales Agreement the B&O :,rill
be responsible for subsequently earned pension benefits for
non
management employees who are actively employed by I1&SS on the
date of consummation of sale. The B&O states that if it were
r eauired to hire furloughed N&SS employees, it would be exposed
to additional pension costs, which is contrary to the Agreement
it made with the N&SS. The B&O states it is unwilling to in
crease its pension liability to include rI&SS employees who were
furloughed on day of sale.
The Carriers rais; another problem with regard to extending NY Dock Conditions to furloughed N&SS employees. It notes
the iTY Dock Conditions provide a protection period =or up to
six years for displaced or dismissed employees. They s Late a
possible
construction of
the protective conditions night be that for
furloughed employees the protection period could be o= unlimited
duration, while it is only six years for active employees. The
Carriers stress that such a strained construction might come to
OVJs.
-'nev add that :few Yo=:: Dock Conditions were only intended to protect ac Live employees adversely af=ec ted by ',-.he tr ansaction but not =urlouched employees.
The Carrier stated however they are willing to modify
their original proposal and offer N&SS maintenance of way employees the same rights as granted B°AC employees, i.e., employ
furloughed employees of i1&SS as new B&O employees .hen needed,
depending on their fitness and ability.
The Carriers deny that the Durango case supports the Organization's position on this issue. ^::ey assert that in this
case it was held that for an employee to be eligible -for status
of "Dismissed" or "Displaced" employee, the employee had to
have employment rights. However, the Carriers stress that the
concepts of "Dismissed" or "Displaced" employees apvly only to
active employees.
The Carrier also contend there i s no valid basis -for the
USST-Als contention that the period used to
determine
when and
whether there were active employees, should e:;clude the time
when all i7&SS employees are furloughed due to temporary shut
down of the U. S. Steel Plant such as at Ch= i stmas and the furlough that is scheduled for August 19°3. The Carriers state
the allegations of US1:~ are misleading because there are no
furlouahs scheduled for August, or Christnas in the past. ZT'r.en
=url oughs have occurred in
the
past a t Christmas '-..hey were the
result- of: a lack of business and were varied depending on economies conditions. The Carriers state the furloughs d=d not occur
because
thek;r
were scheduled. The Carriers fu= then note that
i r
USIA is concerned that the Carriers will schedule a fur-
lough i n
an tici nation of the transaction being
consummated,
there are nr ovisions in the i'Y Doc% Conditions to handle said
arbitrary actions.
The Carriers also presented a detailed analysis of the
Oranizations' Implementing Agreement noting the reasons why
said Ag=eement was unacceptable, and instead urged the Arbitrator to adopt its proposed Agreement as amended. The Carriers
stated they objected to the proposed Implementing Agreement
primarily because it maintained the status cruo with respect to
the accruisition of the Newburgh property. Furthermore, some of
the proposals were administratively burdensome while other proposals went beyond the requirements of New York Dock Conditions.
In summary, the Carriers contend that the Organizations
are seeking to maintain the status quo with regard to the Newburgh property. The Organizations, in this case, have taken
an even more extreme position than was taken by the arbitrators
upon whose awards they rely, in that the Organizations would
not agree to permit dovetailing the N&SS employees who are transferred to the B&O onto the B&O Seniority roster.
The Carriers say that if the Organizations' position prevails, there will be no incentive -Eor Carriers to enter into
transactions, with the result that job opportunities will be lost
to the employees of a carrier that will cease to operate as a
separate entity.
Organizations' Posi ti on
rrhe Organizations maintain that an Arbitrator functioning under Article I, Section 4 of the New York Doc : Conditions
lacks the jurisdiction to terminate an e:;isting collective bzrgaining agreement or the representational status of a certified
organization. They add the Carriers seek to use the Nets York
Conditions to avoid their obligations under the Railway Labor
Act not to change the rates of pay or working
conditions except
in accordance with the provisions of Section 6 of the Railway
Labor Act.
The
Organizations state
that Section 2 of Article I eras
inserted by the ICC into the NY Dock Conditions at the direction
of Congress in order to ensure that standard protective benefits in existence for employees prior =o 1975, and those protective benefits dervied from the Appendix C-1 of the Rail Passenger Service Act of 1970, would continue to be available to
employees in transactions encompassed by Title 49 USC 11'47.
The Organizations state the Congressional intent of protecting
employee interests was achieved by Section 2 which expressly
preserved existing collective bargaining agreements and employee
rights affected by a transaction, unless they were changed by
the procedures of the Railway Labor Act. The Organizations
stress that the Carriers should not be permitted to transmute
the NY Dock Conditions from a shield designed to protect employee interests into a sword to be used to deprive them of the
protections granted by the Railway Labor Act.
The Organizations state Article I, Section 4, in light
of its express provisions, cannot be a vehicle for negotiating or terminating collective bargaining agreements or representational status. Nor can Section 4 be a means for handling
"major" disputes under the Railway Labor Act.
The Organizations assert that the Carriers are in error
when they contend that Section 4 authorizes arbitrators to modify existing collective bargaining agreements when such modifications will aid in consummating the transaction. They contend
such an interpretation of Section 4, ignores the express language of Section 2 that provides collective bargaining agreements and rights are to be preserved, and it reads into the
language a provision that cannot be reasonably inferred therefrom. The Organizations assert there is no exception in Section 2 that states it does not apply where changes would aid
the Carriers achieve more quickly the economies of consolidation.
The Organization states that, in light of the explicit
language of Section 2, the Carriers cannot utilize Section 4,
absent the consent of the parties, to change existing agreements, i.e., rates of pay, rules, or working conditions. This
Section limits an arbitrator functioning thereunder, to determine the basic protection for employees who may be dismissed
or displaced as a result of the transaction and to provide for
the selection of forces from all the employees involved.
The Organizations assert their position with regard to
22 -
the applicability of Sections 2 and 4 of Article I, has been
sustained by four recent arbitration decisions. Three cases
arose out of the N&:*l acquisition of the Illinois Terminal and
are known as the N&W-IT Trilogy. All three cases involved the
issue of whether a Section 4 Arbitrator has the authority to
eliminate or modify existing collective bargaining agreements.
All three Arbitrators held that under Section 4 t:zey lacked
jurisdiction to amend collective bargaining agreements, and
that their jurisdiction was confined to altering an existing
agreement in order to effectuate the selection of forces.
In addition to the three N&W Trilogy cases the Organizations cite the Southern-Kentucky Indiana Terminal Signalmen
case, wherein the Arbitrator was faced with the issue of the
Southern RR seeking to consolidate the signal forces of the
KIT with its own. The Organization notes that Arbitrator was
faced with the same arguments the Carriers have advanced in
this case, and he rules the N&W Trilogy applicable to the issue before him, and concluded that he had no jurisdiction to
apply the Southern Agreement as requested by that Carrier.
The Organizations also cite another Arbitration Award,
wherein the Arbitrator decided that the attempted transfer of
two machinists and work from the shop of one railroad to the
shop of another carrier, through the proposed New York Dock
implementing agreement, could not be accomplished, because Section 4 did not confer the jurisdiction upon him to alter rates
of may or other benefits preserved by Section 2.
These i nternr a rations of an arbitrator's jurisdiction
under Section 4 of the New Yor?: Dock are entirely consistent
with the scope of an arbitrator's authority under the employee
protective provisions imposed by the ICC prior to the 1976 amendment by which Congress substantially expanded the protection it required to be imposed to protect employees. That amendment required an arrangement, such as in this case, that
combined the New Orleans conditions with ADoendix C-1. The Organizations also cited the Southern-Central of Georgia case
(1967) wherein the ICC recognized the separate nature of employee rights derived from collective bargaining agreements from
those imposed on carriers as a result of ICC conditions.
The Organizations further state that, although the Carriers are dissatisfied with the Arbitrators' interpretation of
their jurisdiction of Article I, Section 4 in the N&'.-1 Trilogy
and Southern-KIT cases they still seek to expand the Arbitrator's jurisdiction in this case by advancing the same arguments
which were rejected by the other arbitrators. The Organizations suggest that the Carriers should be estopped from raising
tthose arguments in this present case because the Trilogy and
Southern-KIT cases were issued long before the Carriers made
their Purchase Agreement. Nor did the Carriers reques %_ k..Ale ICC
to overrule hose arbitrators' decisions, and the ICC approved
the Purchase Agreement subject to the New York Dock Conditions
without reference to the awards of- those arbitrators.
The Organizations assert that there must be a finality
- 24
to the `-:cards. The Carriers should be estopped from seeking
to overrule those wards, based on the arguments already advanc-
ed, especially in those situations where the Carriers had the
opportunity to present its arguments against the Awards to the
ICC but failed to do so.
The Organizations state the particular facts of this
case made it unfair to accept the Carriers' arguments. To ac-
cept the B&O proposal would insure N&SS employees working in an
unau thorized expansion of the B&O-BIfi-TE semi
on
tdistrict district would
be receiving the same wage rates as B&O employees, but the B&O
would also have to pay these new N&SS employees the supplemental
pension they still enjoy - thus employees working side by side,
will not be receiving equal compensation. This will create
dissenion and make employees believe they have been unfairly
treated.
The Organizations state another problem arising in integrating the seniority of N&SS employees with those of B&O employees, is that this will result
in
the integration of two different types of seniority. B&O employees have seniority based
on service in a particular classification while r1&SS employees
have an industrial or general type of seniority without regard
t
Co
length of service
in
a particular type of classification.
The Organization states that before integrating such rosters,
one type of seniority should be converted into the other, but
this could result in a rearrangement of the seniority order of
active versus furloughed N&SS employees. Because there are so
many inequities in the Carriers' proposals, the Organizations
state to impose them would violate the cardinal tenet of QTY
Dock, i.e., to provide fair and equitable protections for employees affected by the transaction.
The Organizations state a major objection to the Carriers'
proposal for integrating rosters is that it would deny protection to V&SS furloughed employees. While the B&O states it accepts its obligation to the four N&SS employees who it will put
in active service, it contends that, since the 12 furloughed em=
ployees will not be displaced or dismissed employees as a result
of the transaction, these furloughed employees will have no
claim to any type of protection under QTY Dock. The Organizations, however, insist that 49 U.S.C. 11347 and Article I, Section 2 provide protection for all affected employees. It makes
no distinction between furloughed and active employees. Section
2 requires the preservation of employment rights of all employees
affected by
a transaction.
The Carriers
I
proposal could not
preserve the collective bargaining rights of furloughed N&SS employees. It would place them in a worse position with respect
to their employment and this is in contravention of the Congressional directive.
The Organizations urge one seniority district for all 16
iv&SS employees. It stresses it has not argued that all 16 employees must be employed. It has only urged a method to ensure
that the 16 employees continue to maintain their existing recall
rights to the B&O-employment. These recall rights exist by vir-
tue of
existing
collective bargaining agreements and must be
preserved. They assert that
no
implementing agreement can
abolish or curtail these rights.
The UST states that the purpose of the New York Dock
Conditions is to protect employees who are involved in this acquisition, and there is no valid basis to have a wholesale exclusion of N&SS furloughed employees. 'these employees are entitled to be listed on a seniority roster. The Organizations
state the test for their selection as mart of the work force is
not whether they are eligible for a dismissal or displacement
allowance, but rather whether they are involved employees in
this acquisition.
The Organizations assert that the Carriers amended proposal to treat all furloughed N&SS employees as new H&O employees is a proposal that offers illusory rather than meaningful
protection to them.
The US:·TA urges that the N&SS area be established as a
separate seniority district, not only because it preserves the
respective collective bargaining agreements, but also because
it facilitates the implementation of the selection of forces in
a fair and equitable manner. Having such a separate district
would give the furloughed N&SS employees a reasonable prospect
of future employment without interfering with the operation of
the railroad.
2''he Organizations further state that in the proposed
Implementing Agreement its proposals for claim procedures,
should be adoa ted rather than tie claim or ocedures of the current B&0 collective bargaining agreement. T::e:, assert t::at t=e
collective bargaining agreements procedures deal with claims
under 4"--he =ides Agreements, but not claims for benefits under
the New York Dock
Conditions. The former provisi ores are designed to handle claims for protective benefits.
The Organizations also contend its test period proposal,
i.e., that only those months in which an employee performed
compensated service for more than
50°4' o`' the
normal working
days, be included in the test period. They deny tra t this is
an undue enrichment scheme, but a recognition that employees
who are apt to be dismissed or displaced will not have wor'l:ed
a full 12 months in a given year.
The Organizations state because the ICC has held that
not all railroads have shown they needed such a modi
fied test period, it has not honored such a request. However,
the ICC left
open
the issue for consideration under article I,
Section 4 depending on the specific facts of a case. In this
case there are facts that warrant adopting such a test period.
'she
record shows that 27&SS has recently undertaken cost
savings measures and this results in an unfair reduction in
the protective allowances to displaced or dismissed F&SS employees.
For all of the foregoing reasons the Organizations request the Arbitrator adopt their proposals for framing an implementi ng agreement, !'litre the exception as to the effective
23 -
ca to of the arrangement. The Organizations state t::ey ar e
agreeable to accepting the Carriers' proposal on this iten.
Findings:
7hen we turn to the core issue in this dispute, i.e.,
our authority under Article I, Section 4, when the nzrties are
unabl a to agree upon the terms of an Implementing agreement#
eye must conclude that we lack the authority under Section 4 to
alter the ra tes of pay, the working rules and other terms and
conditions of an existing collective bargaining agreement, be
cause these contractual provisions are preserved by the en
- language of Section 2 of :rticle I.
We are fortified in our conclusion by the awards rendered in the NE-17-IT Trilogy, the Southern-KIT
and the
H&O-L&TIALMATZ cases. We have carefully reviewed these awards and find
them directly in point with the present case. The four neutrals
who rendered these awards, seasoned and knowledgeable arbitrators, clearly and unequivocally held that the proscriptions of
Sec t-ion 2 denied arbitrators,, acting under the manda to of Section 4, the authority to modify or terminate the terms and conditions of existing collective bargaining agreements. They
held that Section 4 did not invest arbitrators with the authority to be a compulsory interest arbitrator and to change or
abolish existing collective bargaining agreements in contravention of the procedures prescribed by Section 6 of the __R,ailway Labor Act.
We are convinced that stability of railroad labor relations would not be served by our departure from the basic
holdings of these five cited awards. Several hundred years
ago, the great English Jurist, Lord Coke states:
"The known certainty of the lacy is the
safety of all."
:7ere we to issue an at-yard of a different tenor, it would create
uncertainty and lead the parties to relitigate the issue end
lessly. Stability and certainty regarding legal and contract
ual rights are as important as abstract correctness of posi
tion.
We find the arbitration awards cited by the Carriers
seeking to prove that other arbitrators have rendered awards
with different conclusions, are awards that did not deal precisely with the issue of the authority of a Section 4 Arbitrator in
light of Section 2. For example, in the Detroit Terminal case,
the issue herein involved was never raised because the Detroit
Terminal Yardmasters did not object to their contract being
terminated. They wanted to be placed on the Conrail Yardmaster
seniority roster, and their prinary concern was to receive favorable positions on the Conrail Yardmaster seniority roster upon being integrated thereon. The Peterson awards were only tangential to the instant case. Referee Peterson was not called
upon to extinguish any existing collective bargaining agreement,
and in one terminal the yardmasters were not operating under any
collective bargaining agreement. I-Te do not find that the Peter-
son awards reoresen t a material depaztore from the Sri logy a.-~d
the other ci ted atlards.
They
did not deal with the specific issue in our case
With regard to the !CC rulings cited by the Carriers,
those rulings did not deal with the juxtaposition of Section
versus Section 2 of Article I. Because we f i nd that the Trilogy and Southern-KIT and B&0-L&N cases are directly in point
with the core issue
in
the instant case, and the other cases
cited by the Carriers are not, we are not inclined to depart
from the awards
in
point, and therefore must conclude that we
lack the authority to set aside the collective bargaining agreerent in effect between fi&SS and the UST-TA, even though it may
impede the speedy integration of the i7&SS and the B&O.
When we ne :t turn to the putative contractual relation
between the B&O and the N&SS employees whom the B&O did not
want to add to its work force, or who were in a furloughed s tatus at the time the ICC approved the application for purchase,
we conclude that all the N&SS employees were involved in the
transaction and had viable rights that should be protected and
not vitiated by this proceeding. While i t is unquestioned that
the B&0 has the sole discretion to determine the size of the
work force it wants to use from N&SS forces. No Neutral can
prescribe the size of the work force that rust be utilized.
However, this does not mean that the B&O can, or
should
be permitted, unilaterally to extinguish the vested seniority and pension rights of inactive 27&SS employees. The B&O intends to
operate on N&SS property and it is inappropriate for the B&O to
take action that would cause the N&SS to lose permanently thei r
recall rights to work on N&SS territory, if the e:d.gencies of
operations should warrant such a happy state. Ve find the B&C, s
amended proposal to hire inactive N&SS employees as new B&O
employees, is not a satisfactory resolution of this problem.
We find the instant situation does not represent situation where the carries is abandoning a property or closing an
office. The B&O intends to integrate and operate the N&SS property as part of its Cleveland Yard. Consequently, this continued operation will require the services of maintenance of
way employees. T'Tia find that it is only fair and just to permi t
N&SS employees active and inactive, under appropriate circumstances, to have a priority to perform work on the _1&SS property. It seers particularly appropriate to preserve the seniority of these 16 employees whose seniority covers a range
from 33 to 4 years. All the t'&SS employees should be on a
seniority roster and not be excluded from whatever work opportunities might develop in due course in the N&SS area.
Ile find, therefore, that it is appropriate, based on
the facts in this case, to establish the P1&SS property or area
as a separate seniority district because it will facilitate
the protection of the seniority rights of the N&SS employees,
as well as make for a fair and eqni table selection of -forces.
previously stated, since the B&O intends to operate over the
N&SS property, and since the property will require maintenance
of way services, it will not interfer with the operation of
- 32 -
the railroad to have a seniority roster composed of `TOSS employees available to render necessary service. The B&O will
still have absolute control of how many of these employees
will use, but when it needs maintenance of way employees in
the ZZ&SS territory, it should be compelled to utilize those
_J&SS employees who are able and fit to perform the work.
Tle find that it is also more appropriate to maintain separate roster and seniority district for :1&SS employees rather
than integrate them into the existing requisite B&O seniority
roster because of the different nature of seniority, and the
difference in gross compensation, and to preserve employment
rights. There are too many disparate contractual elements in
respective collective bargaining agreements to dovetail them.
However, the present Implementing Agreement does not have to
be frozen for all time. After the acquisition becomes operative, there is no reason why the parties cannot negotiate an
agreement that will be congruent with their respective needs.
But we must conclude that for the time being, a separate seniority district and roster will preserve to the affected
N&SS employees their employment and supplemental pension rights,
which would be in accord with the Congressional
intent.
We have drafted an Implementing Agreement which we believe is consistent with the above stated Findings. We find
inappropriate some of the proposals of the Organizations with
regard to a moving allowance, or a modified test period and
certain procedural aspects of the claim procedures, and have
it
not adopted them.
We believe that the attached Implementing Agreement
represents an appropriate basis for the selection of forces
pursuant to this Acquisition.
AMM: (1) The Arbitrator lacks the authority to modify,
substitute or terminate the existing collective bargaining agreements, or any ter:is thereof, without the express mutual consent of parties.
(2) The parties are direr ted to execute the attached Implementing Agreement to effect an appropriate selection of forces resulting Eton the
Acquisition.
(3) This Decision and Award and attached ImDle^enting Agreement are intended to resolve all outstanding issues, as provided for--by Article I,
Section 4, of the Mew York Dock Conditions.
Ja Seidenberg, Arbitr adr
,- - (2
t.
31 , 1
io