This arbitration, conducted pursuant to Article I, Section 11 of the New York Dock Employee Protective Conditions, stems from the decision of the Burlington Northern and Santa Fe Railway Company (hereinafter `BNSF') to consolidate seniority districts. The BNSF system includes 33,000 miles of track through 28 states and two Canadian providences. The Carrier employs more than 40,000 people. Of those, some 7,500 are active Maintenance of Way employees, who repair and maintain track as well as performing maintenance of buildings and bridges. BNSF, the result merger of a 1995 Burlington Northern, Inc. and the Santa Fe Pacific
Corporation, is a party to national and local collective bargaining agreements with the Brotherhood of Maintenance of Way Employes ("BMWE"). Maintenance of Way workers are normally organized into "gangs" ranging in size from two to five employees to as many as seventy. The collective bargaining agreements between the parties define the geographic area in which gangs are assigned. Each seniority district carries a separate seniority roster and, for the most part, employees only work on jobs within their own seniority district. However, the contracts also provide for certain gangs to work across seniority districts. Regional System Gangs ("RSG"), for example, can work anywhere in the BNSF system.'
The dispute in this case surrounds a 1999 Seniority District consolidation. Prior to that time, the BNSF system was divided into 47 separate seniority districts. The result of this, according to the employer, was a general inefficiency in the utilization of its Maintenance of Way employees and their equipment, including misallocation of work. For this reason, the Carrier decided to "rationalize" seniority districts by combining them into fewer, larger entities. Such a consolidation, however, required modification of the labor agreements that existed between the BNSF and BMWE. Significant to this case, two important procedures are involved, and will be described in some detail below -- (1) the New York Dock implementing agreement procedures and (2) the implementing procedures found in Article 7GII of the so-called "Imposed Agreement." New York Dock
According to the Interstate Commerce Act, railroad consolidations require the Surface Transportation Board to impose employee protective conditions on carriers involved in the
employees that flow from the mergers. For this reason, the New York Dock conditions impose minimum levels of protections applicable to affected employees. Before a carrier can implement operational changes following the STB's merger approval, the carrier must consummate an implementing agreement with its unions. The implementing agreement directs itself to the specifics of how employees are to be selected from the respective carriers for the purpose of performing work in the new entity. Such agreement also accomplishes any necessary change to work rules that would otherwise preclude the necessary combination of workers, equipment and facilities. Following the requisite notice to the unions' the carrier will propose specifics as to, for example, which contracts will govern the merged work and the manner in which the various labor agreements need modification to accommodate the new combinations. Foreseeing the possibility of a dispute over these proposals, the New York Dock conditions provide, in Article 1, Section 11, for arbitration.' A New York Dock arbitrator has the authority to impose necessary modifications to the labor contracts for the purpose of implementing the various elements of the combination.'
To qualify for the various monetary benefits available under the New York Dock conditionss, the employee must satisfy an initial burden of showing that he or she has been placed in a worse position as a result of a New York Dock "transaction"'. An employee seeking to avail
The parties may arbitrate their differences over seniority district consolidation, according to Article XVI of the Imposed Agreement.
These two documents, both relevant to seniority district consolidation, are important to the case before this Board. In this case, finding it necessary to consolidate the 47 seniority districts into 9 and to create 10 "common zones" in terminal areas within the newly-combined district, containing track of both the former Burlington Northern as well as the Santa Fe and/or Frisco Carriers, BNSF sent a notice to BMWE on April 7, 1998. The notice referenced both Article XII and Section 4 of the New York Dock conditions."" Thereafter, the parties carried on extensive discussions directed to, among other things, the question of which aspects of the transaction were to be accomplished pursuant to the New York Dock procedure and which would proceed under Article XII of the Imposed Agreement. The parties resolved this issue by a letter dated July 9, 1998, which stated, in relevant part:
Subsequently, the recommendations of PEB 219, as clarified by the Special Board, were adopted by the parties, including the recommended procedure for the combination and realignment of seniority districts. toArticle JCL Section 1 of the Imposed Agreement
ttThe April 7th letter stated, in relevant part: this is Notice served under Article )[11-combining or realigning seniority districts of the July 29,1991 PER Implementing Document This is also Notice under Section 4 of the New York DWk Conditions, as imposed by the ICC in decision no. 38 of the Finance Docket no. 32549 (v. BN-SF Common Contml/Merger Proceeding), to implements certain changes in operations pursuant to the common control of Burlington Northern Railroad Company and the Atchison, Topeka and Santa Fe Railway Company...
without the restrictions that apply to regional or system production gangs."'s In so holding, the Arbitrator balanced the Carrier's operational need for consolidation of districts with the impact of changes on the workers. He found that district mobile gangs would be "sufficiently similar to regional gangs to warrant many of the same benefits"'6 and went on to require that the Carrier apply various new "rule" and "pays" provisions to the district mobile gangs, including travel allowances, bonuses and informational notices concerning the gang's proposed work locations in the upcoming year. Significantly, these were remedies outside those that would have been provided by the New York Dock conditions.
The claimants in this case, however, contend they may be eligible for New York Dock conditions. The Agreement, it is claimed, flowed directly from the merger which, itself, led to elimination of the seven seniority districts that had comprised Frisco and to their replacement with a new Southeast consolidated seniority district. The new "Division"had become the entire former Frisco district and the effect was to allow the Carrier to use divisional gangs in place of regional gangs. Due to the elimination of current positions, some gang employees applied for the district gangs, others exercised seniority to bump into existing classifications. It is undisputed that the claimants each suffered a loss in pay as a result of these moves." The claimants assert, therefore, that they were "displaced employees" entitled to compensation under the New York Dock conditions as a result of the abolition of the regional B&B gangs and the resultant pay cut. The parties differ on whether the claimants can be eligible for New York Dock conditions, and that matter was presented for resolution by this panel.
The Union says the adverse economic impacts suffered by the claimants were the direct result of the Carrier's implementation of changes related to the Seniority District Consolidation Agreement. The economic harm to the claimants, says the Union, was direct--the changes served to elimination all regional B&B positions and required all claimants to exercise seniority to positions with lower rates of pay.
Specifically, the dispute is whether or not the claimants are "displaced employees" as defined in Article I, section 1(b) of the New York Dock conditions as "an employee of 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." A "transaction" is defined as "any action taken pursuant to authorizations of this Commission on which these provisions have been imposed."" Noting that New York Dock construed the term "transaction" broadly in light of the fact that the event actually affecting employees might occur at a later date than the initial transaction, yet still pursuant to approval of the Commission, the Union notes that the consolidation of rosters and changes in operations attendant to the consolidation at issue here, occurred only four years after the ICUs approval of the BN-Sante Fe merger." Here, too, the Union urges this Board to construe the term "transaction" broadly, requesting that the Carrier be ordered to provide claimants with computations of their test period average earnings and hours worked so the claimants may make an informed election between the benefits available under New York Dock
The Carrier urges that the claim for New York Dock protection must fail. The BMWE, it says, has previously entered into a binding settlement wherein the Union waived any such claim by acknowledging that the seniority district consolidation was not a New York Dock transaction. In its April 1998 settlement agreement with BNSF, says the Carrier, BMWE agreed it "would not claim that the Carrier was required to serve notice under Article I, Section 4 of New York Dock conditions in order to propose consolidation of former Santa Fe seniority districts with former Burlington Northern seniority districts." That agreement, it is claimed, means the consolidation of seniority districts was not a "transaction" within the meaning of the New York Dock protective conditions. Says the Carrier:
In light of this mutual agreement concerning the method by which the consolidation would be handled, it cannot be considered a New York Dock transaction and the Union's claim for New York Dock benefits must be rejected.
The parties agree on the applicable burdens in this case: At the outset, the claimant must show (1) that the "transaction" at issue is a New York Dock transaction and that (2) he or she has been placed in a worse position as a result thereof. Absent more, the seniority districts
consolidation could be a New York Dock transaction. Nothing in the nature of the consolidation itself somehow excludes it from the application of those protective provisions. That it could be such a transaction, however, does not necessarily mean it is. The obligation still remains squarely on the employee to demonstrate the causal nexus that ties the impact, admittedly adverse, to the merger of forces, for the essence of the New York Dock protective provisions is to shield the employee against adverse impacts arising from such events.
In this case, the employees have successfully shouldered that burden. The action directly tied to the dispute in this case was the company's decision, in 1998, to rationalize certain former BN and former Santa Fe seniority districts by combining them into fewer, larger merged districts, each of which incorporated trackage and rosters from both BN and Santa Fe and operated under a single predecessor's collective bargaining ageement. In some instances, that caused employees to change from one prior road collective bargaining agreement to another that had lower pay rates for a particular classification. In other instances, this merger-related consolidation changed how the collective bargaining agreement applied to employees' positions, resulting in lower rates of pay. Unquestionably, that directly impacted the claimants in this case, causing them to assume Divisional, rather than Regional, assignments.22
There was a direct nexus, we conclude, between the creation of the Southeast District, where the claimants worked, and the merger itself. In 1994, the corporate parent of BN claimed, as part of its application to the ICC for permission to control and merge with Santa Fe, that a benefit of the proposed merger would be an increase in operating efficiencies and attendant
23Burlington Northern, Inc.-Control and Merger-Santa FE Pacific Corp. 1Ca.c.2d661, 665(1995 at 671. 2°BMWE v. BNSF Railway Company, Finance Docket No. 32549 (June 24, 2001), at p. 4.
2sld., at page 13. Arbitrator Sunhup went on to characterize the reorganization as "trunsaction-driveo". The company seeks to dismiss this cbaractmization as mete dicta (Carrier rebuttal submission page 9 at etaeq). It is tme, as management notes, that Arbitrator Suntrup was not asked to, nor did he, render findings on whether the seniority
The Carrier notes, however, that an overwhelming percentage of the newly-created Consolidated District 8 (the Southeast) was comprised of pre-consolidation districts that were former Frisco districts.' In fact, says the BNSF, the listed 26 claimants were in no case affected in any way by the incursion of a Santa Fe worker. Indeed, in virtually every case, the claimant's jobs underwent no change at all--they maintained their same positions. But this fact leads to no contrary conclusion. The question before us is whether the claimants were placed in a "worse position". Here, all affected workers were required to accept lower paid positions as a direct consequence of the abolition of their previous positions and the changed application of the collective bargaining agreement to their new positions on the merged BN/Santa Fe district.' Clearly, these workers suffered a detriment to their employment status; that their particular
situations did not involve displacement by a Santa Fe employee does not devitalize the finding that the adverse impact was meaningfully connected to the transaction covered by the New York Dock protections.
The BNSF argues, however, that BMWE is estopped from claiming the seniority district consolidation can be covered by New York Dock protections. BMWE, it is claimed, has previously entered into a binding settlement agreement with BNSF, wherein the parties agreed that the consolidation was not within the scope of the New York Dock conditions.' The Carrier directs the Panel's attention to the 1998 letter that resolved the dispute discussed earlier," concerning the meaning of the April 7 notifications. By that agreement, the Union agreed that creation of, among others, the new Southeast seniority district would be accomplished pursuant to Article JffI. The letter states, in relevant part:
By these terms, the Carrier argues, the Union waived its right to invoke New York Dock protection in this case.
However, we are not persuaded that this letter should be read as accomplishing that goal. The parties were understandably at odds over how, precisely, to utilize and apply the parallel procedures of Article XII and New York Dock. The 1998 Settlement Agreement set that dispute to rest by providing that the Article XII processes would apply, reasonably enough, to the creation of new seniority districts, whereas New York Dock would be directed, as it had in the past, to the
question of force selection and employee assignment. And, the Union agreed it would not claim that the consolidation proposal was somehow defective by the failure to reference Article I, Section 4 ofNew York Dock. But this relatively brief resolution, directed as it was to some knotty procedural issues, did not serve to divest the BMWE workforce of the statutory protections inherent in New York Dock. Nowhere does the Agreement suggest that the Union was abandoning any possibility of showing a nexus between the consolidation and later potential adverse impacts. Beyond the fact that such result cannot be inferred from this language, it would run wholly contrary to the underlying intent of the protective provisions. For these reasons, the finding is that this grievance should be granted.