SPECIAL BOARD Or ADJUSfiMdT Pi0. 570

Established Under

Agreement of September 25, 1964




PARTIES System Federation No. 96
 TO Railway Employes' Department
 DISPUTE: AFL-CIO - Carmen '
 and
 Lehigh Valley Railroad Company

 STAT.~<~.'Zer 1. That the Carrier violated Article III Sections ?_ and 21
 OF CLAIM: of the September. _25, 1901. Agreement, when it improperly con
 tracted out the worm: to rebuild 250 Lox cars an, 10,0 gondolas
 to the United States Railway Equipment Comparw, Washizigton,
 Indiana.
 2. That accordingly, the carrier addition--3-1y co!npensate
 the Carmen and Carmen Helpers presently working at Same,
 Pa., Car Shop and Packerton, Pa., Car Shep. And compensate
 all carmen and carmen helpers furloughed at Sayre and Packer
 ton Shops, (names of claim2nts shown on Ap2>endix "A" and "B"
 attached hereto) on the basis of the number of hours wor~: at
 the straight time rate, performed by employees of the above
 named firm in this instance. The total number of hours com
 pensation to be equally divided among said clabnants.

 FIRDIMS: On June 10, 1969, Carrier entered into leases for the rental of 250
 box cars and 190 gondolas from the United States Railway Equipment
 Company, Des Plaines, Illinois. About three weeks later, i.e., on
 July 3, 1969, Carrier sold outright to U.'-:RE the precise number of box cars and
 gondolas which it had recently leased from that supplier. These transactions _ere
 each complete and binding in ardof themselves, without any reference in the one'
 to the other.



On their face, the documents exchanged did not obligate USR3 to lease back to the Carrier, after renovation, the identical ca^s purchased from the Carrier. According to the Carrier, this was simply an arrangement to provide it with the sane number of cars which it had formerly owned, but had been forced to sell to raise operating capital.

 On the basis of the foregoing transaction, and the fact that Carrier has regularly maintained car shops at Sayre, Pa., and Packcrton, Pa., (although allegedly car -rebuilding has either been discontinued entirely or not performed for some years at said locations) a claim is brought for subcontracting in violation of Article II of the September 25, 1904 Agreement.

 At the time this transaction occurred, Carrier was in dire financial straits, the seriousness of which was shortly proven by the Carrier going into ba.n:cruptcy. Cars had been left idle for lack of money to buy repair materials, employment dropped to lessthan one-half of than; of only twelve years.. before, and many essential. activities were curtailed. The Carrier needed the bad order box cars and gondolas that were standing on storage tracks. Yet, it was prevented from repairing same both by the circumstance that funds -,were not available to purchase the materialsneeded in such a reconditioning program, and by the fact that due to the indefinite unavailability of such equipment (material), the required time of completion of the work could not be met.

 Thus, in the instant situation, the distress is real, not imagined. The Carrier's inability to properly utilize its own equipment (rolling stock) suggests not only the propriety, but the advisability of lease arrangements.

 Where, as here, short term capital. is unobtainable to finance a desperately needed extensive car repair and reconditioning project, and some or all of the criteria listed in Article II, Section I is brought into play, the sale of scram cars, and simultaneous lease. of replacements, does not circumvent the restraints on subcontracting enunciated in the September 25, 1964 Agreement.

 By the terms of Article II, Section 2, Carrier is required (before going ahead with plans to subcontract work falling within the scope of the Agreement of Se_otamber 25, 1964) to give advance notice of intent to contract out. Here Carrier, in the mistaken belief that the arrangements were not in the subcontracting field, did poi; fill in the Carmen General Chair.^_an with the details of the forthcoming event. However, there was no attempt to hid`the documents from,. him, and he was given several opportunities to review the material and take notes.

 Thus, although the approach taken may perhaps be deemed marginal compliance with the Agreement, the Carrier did reveal the relevant documents,
 s.s.A. No. 570 Award No. 245 Case No. 307

 and the Organization did have access to the essential information. Lacking the presence of surprise or secrecy, it cannot be said that Carrier's actions were harmful to the Organization. Indeed, it is hardly to be expected that either party would have abandoned its respective fixed position on this issue had Carrier supplied the Organization with copies of all documents involved.

 AWARD
Claim denied.

 Adopted at Chicago, Illinois, August 6, 1971
a14~Tdt--n Neutral Member

Labor Idembers