Mr. John B. LaRocco
Arbitrator
625 No. 1 Woodside Sierra
Sacramento, CA 95825
On September 23, 1980, the Interstate Commerce Commission (ICC) approved CSX, Inc.'s petition (Finance Docket 28905 (Sub-No. 1)) to control and acquire Chessie System, Inc. and Seaboard Coast Line Industries, Inc., which were the parent corporations of the Chessie System Railroads and the Seaboard Coast Line Railroad respectively. The Chesapeake and Ohio Railway Company (C&0) is a subsidiary of the Chessie System Railroads and the former Louisville and Nashville Railroad Company (L&N) has since been merged into the Seaboard System Railroad (SBD) which is the successor enterprise to the Family Lines. To compensate and protect employees adversely affected by the primary acquisition and related proceedings, the ICC imposed the employee merger protection conditions set forth in New York Dock Railway - Central - Brooklyn Eastern District Terminal, 360 I.C.C. 60, 84-90 (1979); affirmed, hew York Dock Railway v. United States, 609 F.2d 83 (2nd Cir. 1979) ("New York Dock Conditions") on all corporate parties pursuant to the relevant enabling statute. 49 U.S.C. 511347.
This dispute arises out of a May 25, 1984 notice served on the organization by the C&0 and SBD whereby the Carriers informed the Organization that they intended to transfer C&0 signal maintenance work between Chilesburg,
Ct.O/LSN v. 3RSxentucky, and Lexington, Kentucky, to the L&N effective August 22, 1984. The Carrier and the organization conferred on July 2, 1984. Subsequently, they exchanged correspondence and engaged in telephone discussions but were unable to negotiate an implementing agreement. The Carriers next invoked the mandatory arbitration provisions in Article 1, Section 4(a) (1-4) of the New York Dock Conditions. Though the parties concur that the dispute over the terms of an implementing agreement is clearly within the scope of Article 1, Section 4, the parties are in conflict regarding whether the entire controversy may be completely resolved by an Article 1, Section 4 arbitration. Furthermore, the organization asserted that the parties agreed to hold either a consolidated arbitration proceeding under both Sections 4 and 11 or simultaneous Section 4 and Section 11 arbitration hearings. As a result of these disagreements, the extent of the Arbitrator's authority is a fundamental issue in dispute.
An arbitration hearing was held at Cincinnati, Ohio, on November 2, 1984. Both parties filed prehearing submissions and, at the hearing, presented extensive oral
arguments in support of their respective positions. The
1The Carriers responded to some of the organization's arguments in a November 16, 1984 letter. Thus, even if the Organization's post hearing brief violated the parties' stipulation, the Carriers were not deprived of any due process.
Cr,0/r,!,- ~~. i1fZSarose concerning the amount of work being transferred to the L&N and whether five signal employees would be paid protective benefits. Alleging that the May 25, 1984 notice was vague and obscure, the Organization pressed the Carrier to precisely designate the milepost locations of the C&0 signal territory to be transferred to L&N forces. In response, the Carriers confirmed that the territory contained nine grade crossing signals. The parties also discussed who, if anybody, would be detrimentally affected by the change. The organization insisted that an implementing agreement obligate the Carriers to pay either a displacement or dismissal allowance to five C&0 signal workers. According to the Carriers, the Organization made the Carriers promise to provide New York Dock protection to the five workers as a condition precedent to negotiating any implementing agreement.
On or about October 12, 1984, the Carriers proposed an implementing agreement which the Organization rejected. Although the Organization did not proffer a complete, written proposal for an implementing agreement, it enumerated the subjects which, in its view, should be included in a final contract. The record clearly reflects that each party strictly adhered to positions which absolutely thwarted any possibility of reaching a negotiated agreement.
During negotiations, the Organization contended that the transfer of work (from the C&0's Ashland Seniority District) would substantively alter the seniority terms and scope clauses of the applicable collective bargaining agreements contrary to the prohibition set forth in Article 1, Section 2 of the New York Dock Conditions. At the hearing before the Arbitrator, the Organization voluntarily waived the above contention in this particular case and without prejudice to raising a similar Article 1, Section 2 argument in any future dispute.
The Organization has related, in great detail, many facts and factual allegations which occurred prior to the May 25, 1984 notice which, from the organization's perspective, are inextricably tied to the instant transfer of work. The ICUs approval of the primary control application permitted the Barriers to achieve substantial savings by rerouting rail traffic over the shorter route where one or more of the subsidiary railroads :maintained parallel tracks. At the time of the acquisition, the C&0 operated a train line from Ashland to Lexington, Kentucky (.:here it connected with the L&N) via Winchester, Kentucky (the Lexington Subdivision). The L&N ran trains over a shorter rail route between Winchester and Lexington. In conjunction with the primary acquisition, the C&0 sought and obtained trackage rights over the L&N between Winchester and Lexington. I.C.C. Finance Docket No. 28905 (Sub-No.
C t'0/T. L': v . ::;:s13). Concommitantly, the C&0 received ICC authorization to abandon nine miles of track between Winchester and Chilesburg (Milepost 625.38 to Milepost 634.49) and the remaining segment of track running from Lexington to Chilesburg was downgraded to a branch line. I.C.C. Finance Docket No. 28905 (Sub-No. 28).2 Thus, subsequent to the abandonment, the C&0's Lexington to Chilesburg line was isolated except for a connection with the L&N at Lexington.
After permanently diverting C&0 rail traffic to the L&N line between Winchester and Lexington, the C&O moved the headquarters of Independent Signal Maintainer Ullery from Winchester to Mt. Sterling. In early 1982, the Federal Railroad Administration allowed the C&0 to discontinue roadway signals on the Lexington to Chilesburg branch line. Beginning in May 1982, Ullery's territory was extended eastward to Salt Lick which was part of the territory previously maintained by independent Signal Maintainer
2The ICC approvals of the trackage rights and the abandonment were conditioned on the imposition of the Norfolk and WesternMendocino Coast -and Oregon Short Line employee protective conditions. Norfolk and Western Railway - Trackage Rights - Burlington Northern Railroad 354 I.C.C. 605 (1980), as modified by Mendocino Coast Railway - Lease and Operate - California Western Railroad, 360 I.C.C. 653 (1980); Oregon Short Line - Abandonment - Portion of Goshen Branch, 360 I.C.C. 91 (1979). The imposition of these associated employee protective conditions may have little practical significance since any and all affected employees here concurrently covered by the New York Dock Conditions imposed as a condition on the primary acquisition. Cr,p/f_;; ~. .':PS
Damron. In December, 1983, the C&O further expanded Ullery's maintenance responsibilities to encompass all of Damron's territory resulting in the abolition of Damron's position. Exercising-his seniority, Damron claimed a position on the Division Signal Gang displacing Signalman Collins. The bumping continued. Collins displaced Aampton, an Assistant Signalman in Training, who, in turn, displaced Brown who was furloughed. When the Division Signal Gang was abolished in April, 1984, Signalman Damron took an Assistant Signalman position. As of May 25, 1984, Ullery occupied the position assigned to maintain the signal territory which the Carriers intend to transfer to the SBD.
The Organization's C&0 General Chairman filed claims on June 4, 1984 (which he amended on June 8, 1984) under Article 1, Section 11 of the New York Dock Conditions seeking displacement allowances for Ullery, Damron, Collins and Hampton and a dismissal allowance for Brown. The
denied the claims on August 3, 1984. One of the many disagreements between the parties in this case centers on the Arbitrator's authority within the context of an Article 1, Section 4 arbitration, to conclusively adjudicate the Organization's Article 1, Section 11 claims.
C40/LAN V. ERSIn summary, the Carriers urge the Arbitrator to focus solely on the intended coordination specified in the May 25, 1984 notice. All other allegations raised by the Organization are either unrelated to the intended transaction or beyond the jurisdiction of an Article 1, Section 4 New York Dock arbitration. Thus, the Arbitrator's jurisdiction is restricted to determining the terms and conditions of an implementing agreement covering the C60's transfer of signal maintenance work to the SBD.
tained the essential elements to trigger Section 4 dispute resolution process. All
the Article 1,
signal work on
the Lexington to Chilesburg C&0 rail line is to be trans
ferred to the LsN. Designating mileposts at Lexington and
Chilesburg was unnecessary since the signal territory to be
transferred was on an isolated C&0 rail line. Similarly,
the notice need not list each signal aopara~tus on the ter
ritory. The notice assured the Organization that no forces
would be reduced or transferred which consequently vitiated
the Article 1, Section 4 requirement to formulate a selec
tion of forces appropriate for the transaction. Even if
the notice was slightly imprecise, the organization knew
the number of grade crossing signal devices involved and
was well prepared to negotiate an implementing agreement.
Cr,O/Lscl V. .9P SWhatever information the Organization lacked, the Carrier readily provided. The proposed implementing agreement presented to the Organization in October, 1984 precisely described the limits of the territory covered by the intended transfer.
The parties bargained over an implementing contract. Since the Organization made a final settlement contingent on the Carriers' promise to disburse protective benefits to unaffected signal employees, negotiations broke down. The organization's unyielding position as opposed to any defect in the Carriers' May 25, 1984 notice, precipitated the bargaining deadlock. When further negotiations became fruitless, the Carrier invoked the Article 1, Section 4 interest arbitration provisions so that it could proceed with the ICC authorized transaction.
The main issue before the Arbitrator is what are the most fair and equitable terms of an implementing agreement which conforms to the requirements of the New York Dock Conditions. Whether any employee is or may be adversely affected by this transaction is an appropriate subject for
t:YD Arb., Page 10 tribunal. Brotherhood of Rail-::ay Carmen v. Baltimore .end Ohio Railroad/Seaboard System Railroad, New York Dock Arb., May 1, 1984 (Fredenberger). Nothing in the language of Article 1, Section 4 mandates that an implementing agreement certify who may collect past and future protective allowances. An Article 1, Section 11 arbitration committee is the proper forum for determining the rights of individual employees. Section 11 unambiguously governs the "...enforcement of any provision of this appendix, except sections 4 and 12 of this Article 1..." Clearly, protective benefit rights (Sections 5 and 6) are exclusively cognizable under Section 11 and correspondently excluded from the scope of Section 4.
However, the Carriers do not intend to rearrange forces, abolish positions, or furlough workers as a direct result of the transfer of work. The Organization, which first demanded benefits for five and then later seven workers, has not shown a nexus between the transfer of signal maintenance work on a small section of track and the alleged displacement and dismissal of C&0 workers on the Ashland seniority district. Thus, the transaction will not
affect any-signal employee.!;YD Arb., Page 11 tlove;;-ber 2, 1984 arbitration would address the Section 11 claims filed in June, 1984.
The Carriers urge the Arbitrator to adopt their proposed implementing agreement. 3
B.- The Organization's PositionInstead of narrowly concentrating on the transfer of signal work between Lexington and Chilesburg, the Organization contends that the intended transaction is the culmination of a series of planned coordinations designed to accomplish the Carriers' primary objective, i.e., operating trains over the shorter SBD tracks between Winchester and Lexington. Therefore, an implementing agreement must apply the New York Dock Conditions to employees who were adversely affected by the acquisition, the trackage rights, the abandonment of track between Chilesburg and Winchester, the discontinuance of right of way signals and, finally, the premeditated transfer of grade crossing signal -maintenance (between Lexington and Chilesburg) to the SBD.
NYD Arb., Page 12 proposed changes to be affected by such transaction..." so that the parties may swiftly conduct meaningful, wellinformed negotiations. In this case, genuine bargaining was impossible due to the defective notice. Ensuing discussions were devoted to ascertaining the amount of work to be transferred to the SBD. The Carriers did not even know the number of signal crossing devices in the territory.
Specifically, the Carriers' notice failed to designate the exact mileposts delineating the. territory subject to the transfer, to describe the amount of work transferred to the L&N and to identify the obviously' affected employees. If the timetable milepost designations for Lexington and Winchester are used to determine the scope of the transferred work, three of the nine signal crossing devices are outside the scope of the intended transaction. Moreover, the incumbent C&0 signalman currently assigned to maintain the nine crossing devices will suffer an immediate loss of work. A worker is placed in worse position with respect to his compensation and working conditions even if he is not furloughed. A proper Section 4 notice must embody more than a broad, vague statement of the transaction. The Carriers are barred from implementing the transaction until they issue a notice which satisfies Section 4 and thereafter negotiate an implementing agreement or, in the event of. a deadlock, procure an arbitrated contract.
14YD Arh. , P ,~c~ 13 The record revcals that the parties failed to ne~3otiate over the terms and conditions of an implementing agreement not only due to the lack of an adequate notice but also because the Carriers adamantly refused to apply the New York Dock Conditions to displaced and dismissed employees. Therefore, even if the May 25, 1984 notice was proper, the Arbitrator should issue an order compelling the parties to engage in further bargaining.
The Organization was under the impression that the November 2, 1984 arbitration would completely resolve all facets of the instant controversy. The predominant issue is which workers are entitled to receive New York Dock benefits. Claims were instituted under Section 11 before the parties commenced negotiations. The Organization agreed to combine a Section 4 arbitration with a Section 11 proceeding for the Carriers' benefit. The Carriers wanted an agreement so they could implement the transfer of work. Certainly, it is more inefficient and cumbersome to resolve interrelated issues in a piecemeal fashion.
However, even if this arbitration is limited to Article 1, Section 4, the Arbitrator is empowered to structure an implementing agreement which appropriately, fairly, and completely fixes the rights of all adversely affected employees. Section 4 provides that an implementing agreement shall include an "...application of the terms and conditions of this appendix..." Thus, the Arbitrator is
NYD J,rb., P,!,e 14 only restricted by the four corners of the tlea York Dock Conditions. The New York Dock decisions cited by the Carriers are illogical, erroneous, distinguishable and void of precedential value. It is appropriate to identify displaced and dismissed employees where the Carriers, over a period of time, have placed some signal workers in a worse position with respect to their employment.
The Arbitrator should view the Carriers' course of conduct as a single continuing transaction with the ultimate goal (which the Carriers successfully attained) of rerouting C&0 rail traffic on the shorter L&N line between Winchester and Lexington. As a result of the CSX primary control case, the trackage rights approval and the Chilesburg-Winchester abandonment, at least five workers suffered a loss of compensation. Ullery, after the C&0 moved his headquarters, earned less overtime pay (assuming a base year starting t4ay, 1981). Similarly, Damron's hourly earnings decreased when he was compelled to exercise his seniority rights to a lower rated position. Collins and Hampton were displaced and after they exercised their seniority, Brown was furloughed. In an attempt to circumvent their duty to pay protective benefits to displaced and dismissed workers, the Carriers rearranged forces on the Ashland seniority district in anticipation of transferring the C&0 signal maintenance on the Chilesburg to Lexington branch line to SBD workers. Thus, by the time the Carriers
4The parties agree that this arbitration is, at least, held pursuant to Article 1, Section 4 of the New York Dock Conditions.
t:YD Arb. , r'aje 17 informs the Organization (as well as all interested employees) of the impending, authorized New York Dock transaction so that the Organization and the Carriers may bargain, in good faith, over the terms of an implementing ag?eement. 360 I.C.C. 71. The notice must contain a full and adequate statement of the intended transaction and include an estimate of the number of affected workers. Since the ICC, in Article 1, Section 4(a) did not enumerate the essential elements of a New York Dock notice (aside from the adjectives "full and adequate" and the mandatory estimate), whether a particular notice conforms to Section 4(a) must be decided on a case by case basis.
For several reasons, the Carriers' May 25, 1984 notice complied with the minimum requirements of the Hew York Dock Conditions.
First, the notice described the transaction in sufficient detail including the geographic location, type of work and the end result of the transfer. It is unnecessary for the Carriers to list each signal mechanism so long as they outline the territory subject to the transfer provided all signal maintenance work in the specified territory will be transferred. Second, in this case, the transaction concerns an isolated segment of track (unconnected to any other C&0 line). The organization easily ascertained the limits of the transaction and it was well prepared for negotiations. Third, Article 1, Section 4(a) does not
NY D l,rb. , Pi ge 18 require the Carrier to identify, by name, all potentially affected employees. Section 4(a) unambiguously states that the notice shall include an estimate of the "...number of employees affected by the transaction." Fourth, even an inaccurate or incorrect estimate of the number of affected employees does not presumptively invalidate the notice assuming the estimate is made in good faith. If, as the Organization contends, the Carriers' estimate is wrong, it. may seek remedies provided by the New York Dock Conditions. Thus, under the peculiar circumstances of this case, the Carriers' May 25, 1984 notice was proper.
B. The NegotiationsThe Carrier and the Organization engaged in negotiations over an implementing agreement on July 2, 1984 and through later correspondence. Bargaining continued up to the arbitration hearing, which is well past the mandatory minimum time period in Article I, Section 4.
Negotiations became deadlocked because neither party was willing to compromise on whether or not workers named by the Organization were affected employees. The Organization
took the position that the issue should be resolved as a package deal (with an implementing contract) while the Carrier wanted to defer the dispute to an Article 1,
Section 11 arbitration. There is no defect in the bargainNYD I,rb. , Pa(je 19 bargaining in this case was fractious and frustrating for both parties, the Carriers and the Organization genuinely and sincerely attempted to reach an accord which would apply the New York Dock Conditions to the intended transaction.
When the Carriers' transaction could arguably cause the rearrangement, dismissal or displacement of employee s# the Arbitrator is expressly charged with writing an implementing agreement which provides "...for the selection of forces from all employees involved on a basis accepted as appropriate for application in the particular case..." 360 I.C.C. 85. Most importantly, an implementing agreement must provide for the application of the New York Dock Conditions.
The major dispute herein centers on the Organization's contention that certain signal employees were adversely affected by this transaction, prior related transactions or a continuing transaction commencing with the primary control application. The Carriers submit that this issue is beyond the jurisdiction of an Article 1, Section 4 arbitration. The exact question is whether this Article 1, Section 4 Arbitrator should determine if the employees are entitled to protective benefits, and incorporate the findings into an implementing agreement. In answering the question, the Arbitrator must evaluate the underlying facts
t:YD Arb. , Page 20 of this particular transaction to write a fair and equitable agreement which applies the level of employee protection set forth in the New York Dock Conditions. The ICC observed that, "Particular problems arising from the varying facts of specific cases are best handled by the individual parties involved within the framework of negotiation and arbitration...' 360 I.C.C. 75.
Regardless of whether or not the Organization correct-, ly argues that one or more employees will be affected by this transaction, the. Carriers' proposed implementing agreement (except for one modification which will be discussed later) fairly applies the New York Dock Conditions to any signal employee who may be dismissed or displaced as a result of this transaction. Section 2 of the Carriers' proposal comprehensively provides protection for any affected employee.
Determining if the employees identified by the Organization are entitled to protective benefits as part of this Article 1, Section 4 arbitration is fraught with difficulties. If an implementing agreement were to list each affected employee, it may operate to exclude any other worker who is later affected by the instant transaction. Since it would be necessary to have an open-ended provision for the protection of any employee affected by the unforeseen consequences of the transaction, the Carriers' pro-
WiD Arb., P1ge 21 posal (Section 2) already accomplishes the same purpose with simple,. straightforward language.
The Organization's position is inconsistent with the manner in which it originally brought its claims on the property. The June 4, 1984 claims, as amended on June 8, 1984, were unmistakably filed under Article 1, Section 11 of the New York Dock Conditions. The organization has not articulated why the claims must now be resolved and incorporated into an implementing agreement governing the transfer of a modicum of signal maintenance work. Surely, if the Organization's factual allegations can be substantiated and the five signal workers are displaced or dismissed employees, the Organization could have instituted the claims for New York Dock benefits (or similar benefits under other employee protective conditions) before the Carriers notified the Organization that they intended to undertake a transaction which would require the negotiation or arbitration of an implementing agreement.
The di!ficulty with deciding who might be affected by this particular transaction convinces the Arbitrator that
the issues raised by the Organization are best left to anNYD Arh. , P :'9C 22 a rate, neutral tribunal. 'rhe relevant part of Article 1, Section 11 (a) reads:
The thrust of the organization claims cuts directly to enforcing the New York Dock Conditions. Indeed, Article 1, Section 11 not only expressly uses the term enforcement (which is not found in Section 4) but also sets forth the burden of going forward and the burden of proving an entitlement to protective benefits. See Article 1, Section 11(e), 360 I.C.C. 88. Thus, this Arbitrator's jurisdiction, when promulgating an implementing agreement, is limited to the criteria specified in Article 1, Section 4. Brotherhood of Railway Carmen and Baltimore and Ohio Railroad Co./Louisville and Nashville Railroad Co., t:ew York Dock Arb., January 12, 1983 (Fredenberger).
The Organization rightly asserts that it would have been more efficient to resolve the tiew York Dock entitlement issues in a single arbitration proceeding or in consecutive Section 4 and Section 11 arbitration hearings. However, an arbitrator's authority flows from
the submission of the parties as well as the New York Dock1:YD ~,rb., Page 23 Section 11 issues with this Section 4 arbitration. Thus, this Arbitrator is confined to adjudicating the Article 1, Section 4 dispute.
The Organization has challenged the portion of the Carriers' proposed implementing agreement which permits them to reduce the allowance of any dismissed employee who has forfeited his right to receive unemployment compensation due to his failure to apply for such benefits. Inasmuch as this Arbitrator has drawn a distinction between Section 4 and Section 11 in the construction of an implementing agreement governing this transaction, the formula for computing the amount of unemployment benefits to be deducted from a dismissal-allowance should be referred to a Section 11 arbitration committee if such a dispute arises. Article 1, Section 6(c) requires the parties to agree upon a procedure for dismissed employees to report any benefits received under an employment insurance law. While there may or may not be an implied duty for an eligible worker to apply for unemployment compensation, the arbitrated implementing agreement covering this transaction should provide for reporting requirements which strictly conform to Article 1, Section 6(c). Also, this modifica-
tion is particularly appropriate for this transaction
1. The parties shall adopt the Carriers' proposed implementing agreement (Carriers' Exhibit M, pages 5-6) but delete Section 4(b) and substitute the words "having claimed oc received" in place of "being entitled to" in Section 4(c);
John B. LaRocco
Arbitrator