In :.he Matter of krbitration

between

SX TRANSPORTATION, INC. FORMER ZHESAPEAKE ;ND
JHIO R:sIL?1AY :_MPANY)

Pursuant =o Secticn ::. : f New York -dock procactzve conditions prescribed --nder _-C= Finance Dockec: 8905

and

UNITED TRANSPORTATION UNION

and

BROTHERHOOD OF LOCOMOTIVE
ENGINEERS

A P P EARANC E S

CSX: H. S. Emerick, Director of Labor Relations
G . F . Le i f , I· 10 .1 ..

RF&P: W. E. Griffin, Jr., Director of Personnel and Labor Relations

UTU: R. S. Bujdoso, General Chairman(also representing BLEi
R. X. Sargent, Secretary, General Committee
J. R. Townsend, Local Chairman

OPINION :AND AWARD

On September 25, 1980, the ICC in Finance Docket No. 8905, approved the application of cSX to acquire control of the railroad subsidiaries of Chessie System, Inc. and Seaboard Zoast Line industries, as the surviving partner in a merger with Chessie and'SCLI, the subsidiary rail carriers to remain 3s separate corporate entities. One of the railroads owned by Chessie was the C&O.

CSX also acquired control of Richmond, Fredericksburg and
Potomac Railway :RF&P) by virtue of the fact that Chessie and
3CLI each owned 40 percent cz Richmond-Washington _c:npany, a non:arriar holding _ompany --rhicz owned 65.3 percent- :_ -:he %rocing st:ck :f RF&P.

As part of y cs order _n Finance :ockec :7o. 3905 , :he imposed the so-called New Yora Dock =onditions fir :he proceccicn of employees. ?aragraph .lie) of chose conditions provides -.hat "each railroad =ontamplating a transaction which _s subject :o =here condicions and may _ause the dismissal ;,r replacement of any employees, or rearrangement of forces, shall give at least ninety ,90) days' written notice of such intended transaction" co he interested employees and their representatives, after which negotiations and, if necessary, arbitration shall take place. Paragraph 4(b) provides that "no change in operations, services, facilities or equipment shall occur .Lntil after an agreement is reached or the decision -:f a referee has been rend=red."

In April, 1986, Carrier rerouted cer:ain overhead traffic from west of Clifton Forge that had previously -roved cn the Mountain, Piedmont and Washington subdivisions of 11-_&O (the socalled western corridor' to move over the dames River and Rivanna subdivisions of C&O (the so-called eastern corridor., to Richmond, where it was then routed via RF&P to Washington. As a result of the changed routing, the last remaining yard assignment at Charlottesville was discontinured and there was 3 =educticn _n road service assignments on the Mountain and Washington subdivisions. The Organization maintained chat =ae rercuting was 3 transaction 3s defined in the :Iew -Iork Dock Conditions and _equir=d the notice specified is ?aragraph .via). -he Carrier disagreed and the parties :hereafter agreed to submit the following =ao questions _o :his arbitration:

"1. Is the Carrier's rerouting of =heir overhead
traffic formerly handled on their Mountain, Piedmont
and Washington Sub-divisions between Clifton Forge,
Virginia, Doswell, Virginia and Washington, D. C., to a
less power Intensive route using their James River and
Rivanna Sub-divisions between Clifton Forge and
Richmond, where it is delivered to and/or received =rom
The Richmond, Fredericksburg and Potomac Railroad for
final handling co/from Washington, 0,:.., a
'transaction' as _ontemplated by the Labor Protective
Conditions co ee imposed pursuant :o -CC Finance Docket
.:8905?"
.:. :f the answer to the foregoing :.s -4n --he
3ffiraacive, :.s the :arriar required :o serve proper
zocice and ccmmence negoccacions --or an `mplemenc:.ng
agreement which shall provide, among )cher Things, :or
.ha selection .:f forces from ail employes involved on
basis accepted 3 s appropriate 3s =ontemplated :oy
3eccyen 4 of the 'New York Cock' prccaccive
,:ondicions?"

"Transaction" is defined in Paragraph 1(a) of the Yew York Dock Conditions as `any action taken pursuant to authorizations of =his Commission on which :hese provisions have been imposed."

The issue is whether the "action" - in this case, the diversion of traffic - was taken because Z,&0 and RF&P came under the =ommcn control of :SX 3s a result oz ICC Docket C8°05, as alleged by the Organization; or whacher the action was an independent decision oz C&O =or reasons not related to the ICC authorization, not planned by or participated in by CSX, and not taken in coordinaticn with RF&P, as alleged by the Carrier.

There is no significant faccual dispute. Both sides agree that a substantial amount of traffic was diverted or rerouted from C&O's mountainous western corridor from Clifton Forge to Doswell and/or Washington, where it interchanged with RF&P. to its water-level eastern corridor from Clifton Forge to Richmond, there to 5e interchanged =o the RF&P for lelivery to Washingtoa or ?ossum Point. There is also agreement :hoc :he reason =or the change was conservation of fuel and greater ef=iciencl of locomotive usage. As stated by the Organization, the most commonly used locomotive, a General Motors iP-35, could 'handle only 1350 cons over the mountain route. but could handle 3,300 cons over the water-level route. As stated by :arrier, :hree six-axle locomotives iSD-50s) were required to move 9000 Tons of coal ( the usual tonnage of a Possum ?oinc train) on the mountain route, while one locomotive could handle double that amount on the water-level route.

The Organization argues that the changed routing, more efficient and economical or not, was not and never would have been made when the RF&P and C&O were competing carriers and not part of the CSX family. It is axiomatic that =arriers Try to haul ill. the traffic :hey -an over =heir own tracks; there was no incentive for C&O to route -raffic via RF&P from Richmond to
Washingtcn rather :hen route it over its :)·wn western _orridor until ~otn it anti ?F&P Became part of ZSX by 7:rtue )f =CC Docket 08905. 7'he :rganizaticn argues that =his -rery :gad cf :nor eased efficiency was =oncamplated 5y the IOC :n i_s -rder, which stated: "Under =he =SX plan, =he parent :ompany ail: develop 3verall _orporat_ acracegy and cperac;on planning and coordination. Rail subsidiaries will execute policies developed at the :op -arch the goal -.3t :maximizing systemwide -rofitabiiity." At other places _n the report, the Commission stated chat .he CSX system would reroute craffic internally to promote efficiency and reduce costs, and that the proposed consolidation and control would strengthen ZF&P by increasing the number of movements over its lines.

The Commission also stated:

"While many of the service benefits are at least cheoretically possible without the consolidation, we cannot ignore- --he incentive chat exists when carriers are under common zoncrol. There is a limit =o what two independent railroads will agree upon in service improvements. Each railroad generally seeks to obtain its own long haul, to maximize its )wn earnings, and to be in charge of a movement. As ire noted, these considerations inhibit the establishment of cooperative services between railroads.'

The Organization also refers co, the --ssuanca ~)z =ertal:a omnibus tariffs as 3n indication that traffic was routed for =he benefit of the :SX'.s "=ommunicy of interest" =ether than for the operating efficiency of and single subsidiary railroad.

From 311 of -his, the Organization argues chat it ;rust be concluded that the =&O action in rerouting traffic from its own lines to the RF&? must have come about because of the combining of C&O and *IF&? 3s part of the CSX which was authorized by the IOC in Cdocket ::3905. The Organization concedes that the rerouting could have been done by C&O before the "marriage". but that the motivation for the action when is was actuallyaccomplished, was the "marriage".

The Carrier contends that the rerouting of traffic involved here eras the result of changing business conditions, could have been accomplished before ehe IOC order approving the creation of the CSX family, did aoc require and was pot dependent upon any
auchoryzacion by =he ZCC and was not taken in :oncert or :oordinacion with --SX Zr ?~F&P but was simply 3 decision by =,i0 :o .~ncerchanqe :=affic with ?F&P at a different point 3s 3 :natter of _.x0 self :ncerest.

=artier points out =hat it has interchanged with RE&? for many fears and could have rerouted its traffic 3s is did in -his case at any time before Docket 8905 aichout 'MCC or other authorization. The decision to do so in _386 was not related to the CSX auchorization and was not due to any policy decision made at CSX level or shared in by :.SX or RE&?, any omnibus tariffs filed by CSX or any coordination of operations, equipment, facilities or services between the C&O and RE&?, which operate as separate and independent carriers for interchange purposes despice boch belonging co the CSX family. The decision was :node because in =he spring of 1986, various budget constraints and the :osc of locomotive fuel oil caused the -=arriar to :naive numerous changes throughout its system, including rerouting traffic as necessary over lass power intensive lines to conserve fuel and for other operating considerations. `artier asserts that there have been various transactions and coordinations brought about under the authorization of ZCC 28905, which have been recognized as transactions and handled as such tinder New York Dock Zonditions; however, the rerouting in this case was not related to that authorization and should not be held to be a transaction thereunder.

"Transaction" has been held in numerous awards and incerprecacions to have 3 meaning similar =o "coordination" 3 s that word is used in the Washington Job ?rotection Agreement. "Coordination " is there defined as:

joint action by two or :pore carriers, whereby they unify, consolidate, merge or pool in whole or in part their separate railroad facilities or any of the operations or service previously performed through such separate facilities."

Other than the fact chat RE&? is a subsidiary carrier of CSX, as C&O is, there is no evidence chat RF&P acted jointly with C&O to bring about the rerouting which jave rise to this dispute. Nor is -here evidence that <:-SX exercised its overall control over both subsidiaries to bring about the rerouting as part of a plan co benefit the CSX community. Statements by RF&P and CiO
representatives are to the contrary. :n -ssance, the Dr;anzzation's case is based upon inference: Since an expressed purpose of the :CC in approving CSX control in Docket 8905 was =o bring about increased efficiency and =educed costs, any rerouting of traffic =tom C&O to RE&? which accomplishes those purposes -must of necessity depend upon and flow from the :CC authorization. ?ut another way, since _'&C and RF&P are both subsidiaries under the control of CSX, any rerouting oz traffic from :&O =o RE&? must of necessity be =he result of joint action.

a review of the submissions and awards submitted by the

parties clqarly establishes that something more than inference is
necessary to support a conclusion that the rerouting here
constituted a transaction. The parties cited two 4uite recent
awards involving CSX and subsidiary carriers. The first, cited by
the Organization, is a November _', 198' award by 3n Arbitration
Board under Finance Docket No. 1160; it held that a diversion to
3&O of traffic formerly received in interchange from the L&N by
C&O at the Cincinnati gateway and handled by =&0 to Toledo, cc
be handled by B&O over its trackage cc Toledo. was a
cransaction. But chat case involved important factual elements
lacking in this case. in the first place, Docket 1160
approved control by C&O over B&O, which were the two carriers
directly involved in the diversion. Second, both carriers
received traffic in interchange at :incinnaci and had trackage
4rom Cincinnati to Toledo. Third, it was conceded chat both
carriers, acting together, encouraged and solicited shippers to
use the 3&O route in preference cc the C&O route. On chose =acts,
the arbitration Committee found that "absent the control
sanctioned by Finance Docket No. 21160, such diversion of traffic
from one railroad to another would not :nave been cooperatively
carried out by the two carriers." The record in the instant case
simply does not support a similar finding that absent the control
by _-SX over C&O and RF&P sanctioned by Finance Docket No. 28905,
the rerouting by C&O and interchange with RF&P
at Richmond would not have been carried out by the two carriers.
The admitted ;oint action by B&O and C&O in the Cincinnati-Toledo
case is lacking here with respect cc C&O and RE&?, and the
rerouting here was not entirely over the tracks of RF&P but
substantially over other tracks of C&O before delivery in
interchange with RF&P, interchange which was not dependent upon
grant of control over Z&O and RF&P ca CSX. The cited award thus
does not support the organization's position here.
The other recent CSX ;ward, Docket 191 of =he Section 13 Disputes Committee, dated December 31, 1-987, was cited by Carrier and involved ; claim oy the Carmen's Organization that a transfer of awicching work from Seaboard System Railroad's Collier Yard in Petersburg, to RF&P's acca Yard at Richmond, which caused a loss of five -Collier Yard positions and the establishment of four new .kcca ':ard positions, eras a coordination of the two yards without providing the notice and protective benefits required by the Washington Job Protection Agreement. In denying the claim, the Committee said: "There is insufficient evidence showing that this intraline change of the location for classifying cars was planned and implemented by both the Carrier and the RF&P. Simply put, if a diversion, of traffic is not a product of joint action, the change is not a coordination."

While the facts in that case are different, the principle is sound. There is insufficient evidence in the case at hand to show that the rerouting was planned and implemented by both the CEO and the RF&P, or by CSX. Since it is not established by substantive evidence, as contrasted with :here inference, that the rerouting was a product of joint action, taken-pursuant to the authorization of CSX control in Docket 28905, the rerouting was not a transaction within the meaning of Paragraph 1(a) of the New York Dock Conditions.

AWARD

Question 1 ?s answered in the negative.

Question 2 is moo

May 26, 1988

7

H. Raymond Cluster arbitrator