SPECIAL BOARD OF ARBITRATION
Established Pursuant to Article 1 Section II
of the New York Dock II Conditions
CASE NO. 1
AWARD NO. 1
PARTIES TO THE DISPUTE
Transportation-Communications International
Union (BRAC)
and
Norfolk Southern Corporation
'gearing Held: September 29, 1988, Room 320, City Centre Building
223 East City Hall Avenue, Norfolk, Virginia
QUESTION AT ISSUE:
Organization's Question
Are D.G. Kendrick and F.D. Scott, Jr., displaced employees
pursuant to New York Dock
Shall Carrier now be required to determine Claimants' (Kendrick
and Scott) test period averages as of the date affected and allow
their claim for New York Dock benefits
Carrier's Question
"Do D.G. Kendrick and F.D. Scott, Jr., meet the definition of
a "displaced employee" under the terms of the New York Dock
protective conditions?"
OPINION OF
BOARD
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AWARD N0. 1
By way of background, the Interstate Commerce Commission approved
the application of the Norfolk Southern Corporation to obtain control
of the separate railroad systems of Norfolk and Western and Southern
under Finance Docket No. 29430. The approval order dated March 19,
1982 included the requirement that New York Dock II conditons apply.
Pursuant to Article 1, Section 4 of the New York Dock conditions the
parties reached a general implementing agreement, dated May 19, 1982,
which was applicable to future transactions covered by the New York
Dock Conditions.l On September 5, 1986, Carrier served notice
consistent with Article II, Section 1 of the Implementing Agreement
of its intention to coordinate certain clerical work performed in
the Norfolk Western Medical Department, Roanoke, Virginia into
Norfolk Southern Casualty Claims Department offices at various locations
on or about October 20, 1986. This coordination necessitated the
abolition of three clerical positions in the Norfolk Western Medical
Department, General Office Seniority District No. 01. As a result
of this action, Claimants Kendrick and Scott were displaced by senior
employees and accordingly, said employees were provided Election
Notification Forms dated December 10, 1986 apprising them of the
1The ICC imposed the employee merger protection conditions set
forth in New York Dock Railway - Control - Brooklyn Eastern District
Terminal, 360 I.C.C. 60, 84-90 (1979); affirmed, New York Dock
Railway v. United States, 609 F. 2d 83 (2nd cir. 1979) ("New York
Dock Conditions") on the Carrier pursuant to the relevant enabling
statute, 49 U.S.C. Sec. 11343, 11347.
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protective agreements to which they were entitled. At the time of
this coordination, Clerks D.G. Kendrick and F.D. Scott were both
assigned to positions on Roanoke Terminal Seniority District No. 45
with a seniority date of August 16, 1974 and July 16, 1974,
respectively. Claimants elected for coverage under New York Dock
conditions and filed appropriate documentation for benefits. However,
by letters dated March 2, 1987, Carrier declined their claims for
protective benefits on the grounds that Claimants did not meet the
essential threshold criteria defining a displaced or dismissed
employee under New York Dock conditions. Carrier's letter of
declination dated July 2, 1987 fully sets forth the Employer's
interpretative position. It reads, in part,:
"We find that claimants in this instance are ineligible for protective
benefits under New York Dock protective conditions inasmuch as they
do not meet the necessary criteria in order to be recognized as a
displaced or dismissed employee under New York Dock conditions.
Under Section 1(b) of New York Dock, a displaced employee is defined
as follows:
"(b) 'Displaced employee' means an employee o= the railroad
who, as a result of a transaction is placed in a worse position
with respect to his compensation and rules governing his
working conditions."
In these instances claimants obtained or could have obtained in the
normal exercise of their seniority rights a position carrying a rate
of pay equal to or exceeding the rate of pay of the position from
which displaced. Thus, these claimants did not fulfill the
threshold burden to be recognized as a displaced employee under the
definition of that term in New York Dock."
Simply put, Carrier contended that Claimants were not affected by the
coordination of work, since they secured or could have secured an
equal or higher paying position in the exercise of their seniority
rights.
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The Organization, in rebuttal, maintained that Carrier misconstrued
the word "position" as contained in Section 1 (b) and Section 5 (a)
of New York Dock to mean "assignment" and the term "compensation" to
mean "rate of payment." Consequently, Carrier's language construction,
according to the Organization is patently inconsistent with several
arbitration awards defining the position. In essence, the Organization
asserted that the word position was not synonymous with job or
assignment but rather clearly connoted status, situation or posture.
(See for example, Arbitration Board No. 284, Oklahoma Conditions,
Western Maryland v. BRAC, September 9, 1964 and Arbitration
Board No. 279 Burlington Conditions, Southern Pacific v. Order of
Railroad Telegraphers October 2, 1963.) More pointedly, the Organization
observed that a careful analysis of Claimants average earnings during
the twelve (12) months preceding their displacement shows that they
were placed in a worse position with respect to compensation. For
example, for the twelve (12) month period prior to the displacement,
Claimant D.G. Kendrick earned $38,427.67 or $3,202.31 average per
month as compared to $2,9201.10 for the month of November, 1986,
$3,093.65 for the month of December, 1986 and $2,255.61 for the month
of January, 1987. In Clerk F.D. Scott's case, the Organization noted
that he earned $39,478.98 for the previous twelve (12) months period
or $3,289.91 average per month as compared to $2,400.63 for the month
of November, 1986, $2,925.13 for the month of December, 1986 and
$3,242.90 for the month of January, 1987. The Organization argued
that Carrier was confusing rates of pay of positions with compensation
earned during the test period, and misapplying the application of
Article I, Section II New York Dock, when it (Carrier) concluded that
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AWARD NO.
an employee's worsening condition must be immediately related to the
transaction. It cited several arbitral awards under New York Dock
Conditions to support its position. (See Union Pacific Railroad
Company, Missouri Pacific Railroad Company v. United Transportation
Union, (C & T Case No. 3) June 24, 1986 and The Chesapeake & Ohio
Railway Company, The Baltimore & Ohio Railroad Company, The Toledo
Terminal Railroad Company v. United Transportation Union, May,18, 1987).
In sum and substance, the Organization asserted that adversely affected
employees are due displacement allowances even if at the time of
displacement they displaced to a position producing compensation equal
to or exceeding the position from which displaced. In other words,
the qualifying litmus test is that the employee has suffered a
worsening of compensation when measured against test period average
earnings. It contended that a worker-may still satisfy the definition
of a displaced employee, notwithstanding, the materialization of the
adverse effect until well after the implementation of the transaction.
As to Carrier's additional contention that Claimant Scott could have
displaced to a position which paid a higher rate of pay, the Organization
argued that Clerk Scott was effectively a displaced employee and thus
Carrier could have offset the earnings he would have earned if he
displaced to a position with a higher rate of pay against his test period
average. On this point, it referenced Transportation-Communications
International Union (BRAC) v. Missouri Pacific Railroad Company, Union
Pacific Railroad Company (BRAC) which held in part,
"Should an employee fail to exercise his seniority to an available positio
producing compensation greater than the position he elects to retain,
Section 5(b) of the New York Conditions allows the Carriers to offset
the employee's protective guarantee."
It concluded that Carrier could not eschew its responsibility under
the law and minimize its compensatory obligations to employees, since
CASE N0. 1
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Congress specifically established a legislative public policy to
protect affected employees' interests in the context of railroad
mergers during a limited protective period.
Carrier, by contrast, asserted that Claimants did not meet the
definition of a "displaced employee" under the New York Dock Conditions,
since they were not placed in a worse position with respect to their
compensation as a result of the transaction. It pointed out that
Clerk Kendrick, in the first instance went from a position carrying a
rate of pay of $2245.22 per month to a position carrying a rate of pay
of $2257.87 per month. In the second instance, when Clerk Kendrick
was again displaced, he went from a position with a rate of pay of
$2308.16 per month to an equal paying position. In the latter case,
Clerk Kendrick displaced from the position of Westbound Booking-Out
Clerk to the position of Relief Clerk No. 3. Clerk Scott was displaced
from a position carrying a rate of pay of $2257.87 per month to a
position with a rate of pay of $2245.22 per month. In Clerk Scott's
case, Carrier observed that he could have obtained readily available
positions paying the same or higher rates of pay. It argued that its
interpretative position was fully supported by numerous arbitration
awards under New York Dock protective conditions and similar protective
arrangements, which have consistently denied protection to employees
involved in a transaction, who obtained a position carrying a rate of
pay equal to or greater than the rate of pay of the positions they
occupied prior to the transaction and who sustain no material change,
in their objective working conditions. In Award No. 4 United
Transportation Union v. Illinois Central Gulf Railroad April 11, 1985,
Carrier noted that the Board therein arbitrating under the Oregon Short
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AWARD N0. 1
Line Conditions held in effect that an employee who was able to obtain
a position where his compensation was equal to or greater than his
compensation prior to the transaction was not in a worse position with
regards to his compensation, and, as such, did not qualify as a
"displaced employee". In further support of this position, Carrier
referenced Award No. 3 of Special Board of Adjustment involving the
United Transportation Union and the Norfolk b. Western Railway Company
(March 29, 1985), The Board in that case, arbitrating under New York
Dock II Conditions, held that the petitioning employee was not
adversely affected by the transaction, since he neither lost a regular
job, nor was involved in a chain of displacements that resulted in a
loss of earnings or compensation. The Board emphasized that an employee
must show that he has been placed in a worse position with respect to
compensation and rules governing working conditions as a result of a
transaction. In addition, see Brotherhood of Maintenance of Way
Employees v. Maine Central Railroad Company September 27, 1987 -
Mendocino Coast Labor Protection. It was also Carrier's position that
the Organization's application of the Section 5 mathematical formula
was too rigid and not a proper test for determining if an employee is
a "displaced employee" under New York Dock Conditions. It asserted that
including overtime in the twelve (12) months test period will inevitably
produce average monthly compensation which in some months exceeds the
earnings of the employee. It maintained that overtime work which was
available to employees on Roanoke Terminal was not related to the
instant transaction, since the operational needs of Roanoke Terminal
necessitated constant overtime usage. The coordination did not affect
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the availability of overtime work on Roanoke Terminal. It pointed
out that in the New York Dock Conditions case involving The
International Brotherhood of Electrical Workers, System Council No. 6
and the Southern Railway Company, the Board (majority) held that
where the reduction of overtime was unrelated to the transaction, the
petitioning claimants were not placed in a worse position. (October 8,
1987). It observed, that in the case of Clerk Scott, he occupied four
(4) different positions during the twelve (12) month period preceding
the transaction and he worked overtime in each position. It argued
that since the availability of overtime was contingent upon varying
service requirements and the added willingness of the employee to
perform overtime work, these variable factors created circumstances
that were unrelated to the transaction. In this connection, it noted
that in the award of a New York Dock Arbitration Committee United
Transportation Union v. Norfolk & Western Railway Company, the Board
held in pertinent part, that the New York Dock Conditions did not
mention an employee being placed in a worse position with respect to
circumstances unrelated to the transaction. The Committee therein
also stated:
"It therefore seems evident that the purpose of the New York Dock
Conditions was to protect employees against the adverse effects of a
transaction, not to insulate all employees against all consequences
of an employment relationship." (August 29, 1986)
Carrier also referenced Award No. 1 Special Board of Adjustment No. 927
involving the Brotherhood of Locomotive Engineers and the Norfolk
Western Railway Company. In that Award, the Board held, in part,:
"The fundamental purpose of most, if not all, employee protective
arrangements is, or was, to provide protection to employees against
adverse effects flowing from the transaction involved and not, as here,
from adverse effects arising from other unrelated causes." (January 30,
1984)
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In considering this case, the basic question before this Board
is whether Claimants were "displaced employees", as that term is
defined in Article 1, Section 11(b) of the New York Dock Conditions.
Section 1 b states:
"Displaced employee" means an employee of the railroad who, as a
result of transaction is placed in a worse position with respect
to his compensation and rules governing his working conditions.,'
There is no dispute regarding the consummation of a transaction
as that term is defined under Section 1(a) of the New York Dock
Conditions, but the parties differ as to whether Clerks Kendrick and
Scott were placed in a worse position with respect to compensation
and rules governing their working conditions. In Award No. 5 of the
New York Dock Conditions case involving Transportation-Communications
International Union (BRAC) and Missouri Pacific Railroad Company and
Union Pacific Railroad Company, March 1, 1988 the Arbitration
Committee considering the same essential issue as before us ruled that
regular overtime, recurring overtime or casual overtime attached to
any assignment was properly included within the test period average
earnings. The Committee, in that dispute, also interpretatively
concluded that the ICC would not have used the terms "monthly compensation" and "total compensation," if the manifest intention was to
restrict the test period average to an amount less than aggregate
earnings. It also concluded that excessive overtime performed directly
in anticipation of an immiment transaction was a distinguishable
exception to the normative overtime inclusions, since this earnings
opportunity would not have accrued to the employee if the affected
Carrier did not implement a transaction. The Organization relied upon
this Award to support its position.
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On the other hand, counterpoised to this position, Carrier argued
that Claimants were not placed in a worse position with respect to
compensation, since the availability of overtime at Roanoke Terminal
reflected circumstances unrelated to the transaction and moreover,
the coordination of certain work between the Norfolk b. Western Medical
Department and the Norfolk Southern Casualty Claim Department did not
affect the availability of overtime work at Roanoke Terminal. In
effect, Carrier maintained that since the New York Conditions did not
specifically mention or indicate that circumstances unrelated to a
transaction were acceptable as qualifying an employee who has suffered
a diminution in earnings for displacement allowance, then Claimants
could not logically be considered as definably eligible "displaced
employees."
In reviewing these arguments, the Board concurs with the
organization's interpretation that the word "position" as contained
in Section 1(b) of the New York Conditions connotes status, situation
or posture rather than a specific job or assignment. The pervasive
arbitral authority cited by the Organization supports our determination.
Further, in a practical sense, the vagaries and uncertainties stemming
from a dynamic displacement chain cannot also presuppose stability
of employment in a specific job or assignment. We agree with Carrier
that an employee affected by a transaction must be placed in a worse
position with respect to compensation and rules governing working
conditions, but we do not agree that overtime compensation earned in
the preceding twelve (12) month test period is precluded from the
prescribed computational formula set forth in Article 1 Section 5(a)
of The New York Dock Conditions.
Section S(a) reads:
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'-S. Displacement allowances - (a) So long after a displaced
employee's displacement as he is unable, in the normal exercise of
his seniority rights under existing agreements, rules and practices,
to obtain a position producing compensation equal to or exceeding
the compensation he received in the position from which he was
displaced, he shall, during his protective period, be paid a monthly
displacement allowance equal to the difference between the monthly
compensation received by him in the position in which he is retained
and the average monthly compensation received by him in the position
from which he was displaced.
"Each displaced employee's displacement allowance shall be
determined by dividing separately by 12 the total compensation
received by the employee and the total time for which he was paid
during the last 12 months in which he performed services immediately
preceding the date of his displacement as a result of the transaction
(thereby producing average monthly compensation and average monthly
time paid for in the test period), and provided further that such
allowance shall also be adjusted to reflect subsequent general wage
increases.
"If a displaced employee's compensation in his retained position
in any month is less in any month in which he performs work than the
aforesaid average compensation (adjusted to reflect subsequent general
wage increases) to which he would have been entitled, he shall be paid
the difference, less compensation for time lost on account of his
voluntary absences to the extent that he is not available for service
equivalent to his average monthly time during the test period, but if
in his retained position he works in any month in excess of the
aforesaid average monthly time paid for during the test period he shall
be additionally compensated for such excess time at the rate of pay of
the retained position."
Analysis of the aforesaid computational language within the context
of cited decisional authority and the intended application of Article 1
Section 1(b) compels us to conclude that using a dispositive standard
herein, rate(s) of pay is too restrictive and inconsistent with the
contemplated purposes of The New York Dock Conditions. Prior
overtime earnings cannot be excluded from the ascertainment of the
twelve (12) month test period, unless said overtime was excessive and
performed directly in anticipation of an imminent transaction or
palpably unrelated to the transaction. Since overtime was not performed
CASE N0. 1
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in anticipation of an imminent transaction, it is permissible to include
such overtime earnings in the computation of the twelve (12) month
test period average. Article 1, Section 5 speaks of total compensation,
average monthly compensation and average monthly time paid which
reflect compensatory magnitudes greater than straight-time earnings.
Based on this formula, Claimants were able to establish a decrease in
earnings for the months of November, 1986, December 1986 and January,
1987, but whether such income diminution was directly attributable to
the transaction must now be determined. Carrier has argued that the
loss of overtime earnings was unrelated to the transaction, since the
coordination of work at Roanoke, Virginia did not affect the availability of overtime at that location. Instead, business fluctuations
accounted for the reduced overtime opportunities. As to the facts
herein, Claimants displaced to positions carrying equivalent rates
of pay. In the case of Clerk Kendrick, he was able to exercise his
seniority to obtain the same rate of pay on one position $2257.87 and
a slightly higher rate $2308.16 on another position. In the case of
Clerk Scott, he displaced from a position paying $2257.87 to $2245.22.
In both cases, their monthly earnings for November 1986, December 1986,
and January 1987 were less than monthly test period average of $3,202.31
for Clerk Kendrick and $3,289.31 for Clerk Scott. Pursuant to Article 1
Section 5 (a), an employee displaced by a transaction who is unable to
secure a position producing compensation not rate of pay, equal to or
exceeding the compensation he received in the position from which he
is displaced shall be paid a monthly displacement allowance during
the protective period. Said allowance shall equal the difference
between the monthly compensation in the retained position and the
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average monthly compensation of the position from which displaced.
Further the allowance is determined by dividing separately by 12
the total compensation received by the employee and the total time for
which he was paid during the last 12 months immediately preceeding
the transaction. Since this methodology as indicated before includes
overtime compensation, the Claimant's prior straight time rate of pay
is not the benchmark measurement criterion. As to the correlative
question, as to whether the reduction in total monthly compensation
for the three (3) months cited was caused by circumstances unrelated
to the transaction, the Board cannot conclude that said asserted
mcnthly reductions were unrelated to the transaction. It was the
displacement effect of the coordination of work at Roanoke, Virginia,
which resulted in the monthly earnings differential herein.
Consequently, and in accordance with Article 1 Section 1(b) of the New
York Dock Conditions, Claimants were definably displaced employees.
Finally, considering the ancillary question as to whether Clerk Scott
could have secured an equal or higher paying position in the exercise
of his seniority rights, Carrier is correct as to the application of
this possibility, but the record is bereft of evidence identifying
particular available positions.
AWARD AND ORDER
1. The Answer the First Question at Issue submitted by the
organization is Yes.
2. The Answer to the Second Question at Issue submitted by the
Organization is
Yes.
3. The Answer to the Question at Issue submitted by the Carrier is
Yes.
George S. ukis.. Chairman and
Neutral Member
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G.C. Edwards, Carri Member
Campbell, ployee Member
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Dated: /~ll~'