PARTIES - System Federation No. 114
 _TO Railway Employes' Department
 DISPUTE : A.F.L. - C.I.O. - Machinists
 d
 Southern Pacific Company (Pacific Lines)
 STATEMENT "1. That the Carrier violated Article II of the
 OF CLAIM : September 25, 1964 Agreement when itimproperly subcon
 tracted out the work of servicing and repairing of Rental
 Automotive Unit #7713 to an outside firm identified as
 Cochran & Celli, Oakland, California, on April 25, 1966.
 2. That accordingly, the Carrier be ordered to additionally
 compensate Motor Car Mechanic D:. Hayes (hereinafter referred
 to as the Claimant) on the basis of the number of hours of
 work of the Machinists' Craft performed by employees of the
 named outside firm on Rental Unit #7713 on the above date."
 Discussion : This case is a companion case to the two cases which eventuated
 ' in Awards Nos. 3 and 42. Involved in this case are the same
 parties, advancing the same sort of claim, and invoking the same provisions of
 the September 1964 Agreement. Both Awards Nos. 3 and 42 sustained the claims
 and the Carrier Members filed written dissents to these awards while the Organi
 zation Members filed a concurring opinion to Award No. 3.

 The operative facts governing the instant claim are that on April 25, 1966, the Carrier sent a leased Chevrolet pick-up truck (Rental Unit #7713) to an outside firm, Cochran & Celli, to have it repaired. The Claimant is a Motor Car Mechanic employed by the Carrier at its West Oakland Shops.

 The record indicates that on February 28, 1964 the Carrier entered into a Vehicle Leasing Agreement with the Interstate Vehicle Management, Inc. (IVM) whereby the Lessor agreed to furnish the Carrier-Lessee, on a lease basis, passenger cars and small trucks. In addition to the September 25, 1964 Agreement, the Carrier and Organization are also parties signatory to a collective bargaining agreement dated April 16, 1942, as revised. The last named agreement contains Article 40 setting forth the scope rule for the Machinists employed by the Carrier.
 Case No. 74 - 2 - S A4 570 Award No. 63

 Organization's Position: The Organization contends that Awards Mos. 3 and
 42 have finally determined the issue and there is no valid basis for the Board. to depart now from the Findings contained in these controlling awards. It states that the issues are identical and that the Carrier has introduced no new evidence that would warrant the rendering of any different Findings than those which were handed down in the two earlier cases. Those two Awards have held that the Carrier improperly subcontracted the repair work to an outside firm in violation of Article II of the 1964 Agreement.

 The Organization notes that in the instant claim, the Carrier violated, in addition to the substantive features of the Agreement, the procedural aspects of Article II because it gave the Organization no advance notice of its intention to subcontract the work or did it furnish the organization with any supporting statements or reasons for its actions.

 The Organization also maintains that the Carrier has not demonstrated by any competent proof that its subcontracting action was permissible under any of the reasons stated in Article II, Section 1. It further adds that if the Board were to allow the Carrier to subcontract the work to outside firms; it would be in effect allowing it to close its automotive and work equipment shops and furlough all motor car mechanics. The Organization asserts that mechanics employed by the Carrier have repaired and maintained all types of automotive and work equipment, included rented and leased equipment, such as Jackson Tie Tampers, McWilliams Tie Tampers, Kershaw Scrarifiers, Kershaw Undercutters and Selma Trailers, prior to September 25, 1964. The Organization lists, without attempting to present an exhaustive list, claims which the Carrier had paid motor car mechanics when outside firms worked on leased or rented equipment. These claims are:











The Organization maintains that the payment of these claims to motor car mechanics is recognition that, under the scope rule, the work or repairing and maintaining automotive and work equipment - be it owned or leased - is work that belongs to these mechanics. It states that in the absence of any contractual provision prohibiting the Carrier from utilizing its mechanical forces to service and repair rented or leased equipment, the Carrier is contractually obligated under the existing provisions to use its employees to - service and maintain automotive equipment being used by the Carrier.
 Case No. 74 - 3 - .S6 A 57D Award No. 63

 The Organization denies the Carrier's assertion that repair and maintenance work on leased equipment is not included in the classification of Work Rules of the Crafts that are parties to the September 1964 Agreement or that it is not encompassed within Rule 40 of the Schedule Agreement. The Organization insists that the work involved in this claim comes squarely within the scope rule, and therefore, when the Carrier subcontracted the work, it breached Article II of the 1964 Agreement.

 The Organization stresses that the provisions of the 1964 Agreement, particularly, Article II, takes precedence over any leasing agreement covering work which is the subject matter of the present claim. It points out that Award,No. 3 specifically ruled that:

The Organization summarizes its position by noting that the matter has already been decided twice in its favor; that Article II provides that work in the classification of work rules will not be contracted out except as provided for in Article II; that there are five stated exceptions set forth in Section 1 of Article II and the Carrier has not brought itself within any of these five exceptions, and therefore it is barred from engaging in contracting out the work; that the Carrier cannot make an agreement with a third party that can validly affect the rights of a party signatory to the September 1964 Agreement; that the purpose of the September 1964 Agreement was to change the existing practices as they pertained to subcontracting; that there would have been no purpose in negotiating the 1964 Agreement if the prior to 1964 practices were to be maintained; that even prior to September 1964 Carrier mechanical forces had the contractual right to repair and service leased and rented equipment. It concludes that for all these aforementioned reasons it was an error for the Carrier to subcontract to an outside firm the repair and maintenance of the Unit involved in this claim.

 Carriers's Position: The Carrier concedes that the present claim is identical
 to the claims decided by Awards Nos-. 3 and 42. However,
 it insists that Award No. 3 was grievously in error, and furthermore, the Neutral,
 in deciding Award No. 42 was wrong in refusing to review the claim involved in
 that award on its merits, and deciding the case on the grounds of consistency
 with Award No. 3. The Carrier states that in view of its specific and detailed
 written dissent to Award No. 3, the Neutral in Award No. 42 was obligated to
 consider the case, de novo, and on its substantive merits.

 The Carrier argues in the present claim that it has rented and leased for many years automotive and work equipment from outside concerns, including construction companies. At no time have Carrier employees ever been considered as having any contractual claim to perform work on these leased or rented pieces of equipment. The contractual authority of its own employees were confined to equipment which it owned. In recent years the Carrier states that it has entered into fleet leasing arrangements for passenger cars and small trucks
 Case No. 74 - 4 _ 58A 570 Award No. 63

 in order to take advantage of the large scale economies and capital conservation to be derived from such arrangements, resulting in it now having approximately 1000 cars under lease.

 The Carrier points out that the leasing arrangement which covers the truck involved in the present claim, contains a provision which states, among other things, in Section 2 of the Lease:



The Carrier states that in addition to the above provision the Manual of Operations and Maintenance supplied by the Lessor with each vehicle leased states:

The Carrier states that it was pursuant to these requirements of the Tease that the leased vehicle in issue was sent to Cochran & Celli. a franchised Chevrolet dealer, for the necessary repairs, and this outside firm in turn sent the bill for the work directly to IVM in Portland, Oregon.

 The principal thrust of the Carrier's argument is that no subcontracting has been performed by the transaction in question, and therefore it_ does not come within the terms of Article II of the 1964 Agreement. It states that repairs were performed on a vehicle which it did not own, and moreover, were performed in accordance with the terms of an agreement which was in effect prior to the execution of the September 1964 Agreement. The Carrier also contends that the servicing of leased automotive equipment is not within the classification of work rules of the crafts signatory to the 1964 Agreement. It insists that the work performed was not exclusively limited to the Claimant's craft under the Scope Rule. There has been no practice that has ever recognized work on leased equipment as belonging exclusively to the mechanical forces.

 The Carrier further notes that despite the fact that it has been making leasing agreements'for a number of years, Award No. 3 was only able to find as evidence of a prior practice, one claim which it held comparable to the one under present consideration, that is, a situation where a Claimant had his claim allowed when employees of an outside firm worked on Carrier leased equipment. But the Carrier further notes that this claim was allowed because of extenuating circumstances fully known to the Organization when the claim was allowed, namely, that the repair work on the leased automobile was performed on the Carrier's property. The Carrier states that the other allowed claims cited by the Organization are not comparable to the instant case because they involved work on leased heavy work equipment for which there were no facilities maintained by the Lessor to which the equipment could be easily or readily sent for servicing. The Carrier maintains that the record does not support the
 Case No. 74 - 5 - s (34S7D Award No. 63

 Organization's contention that the employees were contractually entitled to perform repair work on leased automotive equipment because of one isolated and "extenuating-circumstances" claim. On the contrary, it asserts the record discloses that prior to September 25, 1964; employees did not contend that they had the contractual right to perform repair work on automotive equipment not owned by the Carrier, when the work was performed off the Carrier property. The Carrier also cites several Second Division Awards which it states have held that work performed by outside firm employees on equipment which the Carrier does not own, is not violative of the contract rights of said Carrier employees because these employees possess no right to work on this sort of equipment.

 The Carrier sets forth the facts which it contends would, even under the exceptions enumerated in Article II, Section 1 (1)(2)(3)(4)(5) have permitted it to subcontract the work in question, even if the work was covered by Article II, which it was not. The Carrier stresses the. reasons why it was not feasible or economical for it, with its present manpower and facilities, to undertake the financial burden of purchasing and maintaining an additional 1000 vechiles in addition to the 1175 pieces of equipment it already owns and maintains. The Carrier emphasizes that it, and it alone., must be allowed to make the decisions as to where it will invest and utilize its capital in order that it might maximize its efficiency as a transportation business.

 The Carrier denies that there is anything in the terms of the 1964 Agreement that prohibits or limits it from making leasing or rental agreements. It notes that Article I, Section 2(d) recognizes that the Carrier has that right, subject to the obligation of making employees, adversely affected by these leasing arrangements, eligible to receive the benefits of the Washington Job Protection Agreement of 1936.

 FINDINGS: The Neutral Member of the Board states, by way of preface, that
 he has reviewed de novo and at considerable length the respective
 positions of the parties and the evidence adduced in support thereof, including
 the several dissenting and concurring opinions to Awards Nos. 3 and 42. The
 Neutral tfember agrees that there is great value to the parties to have con
 sistency and stability in awards, nevertheless, he is also convinced that the
 parties do not wish him to discharge his duties in a perfunctorily manner, or
 be an instrument for perpetuating gross errors, either his own or those of his
 colleagues. The most important function that a Neutral can render is to assure
 the parties that the arguments and evidence they advance, seriously and in good
 faith, will receive the attention they merit.

 It is within this frame of reference that the Neutral Member of the Board has reviewed the lengthy record of this case. He must conclude, after this analysis, albeit somewhat reluctantly, that the record does not support the Findings rendered in Awards Nos. 3 and 42, and therefore he cannot concur and follow the aforesaid Findings. The Findings in this case demand that the claim be denied fcr the following reasons stated in capsule form: (1) the record shows that there was an established practice on part of the Carrier to make rental and leasing arrangements for automotive equipment prior to September 25, 190'4; (2) the record shows no established practice or articulated rule granting the Carrier's motor car mechanics the contractual right to repair or service leased or rented automotive equipment; (3) there is nothing implied or expressed in the terms and provisions of the September 25, 1964 Agreement that precludes or limits the Carrier from continuing its practice of leasing or renting automotive
 Case No. 74 - 6 - mfr 57o Award No. 63

 equipment; (4) that the making of leasing or rental arrangements for automotive equipment does not constitute "subcontracting" with its attendant limitations within the contemplation and meaning of Article II of the 1964 Agreement.

 Discussing the conclusions ad seratim in some greater detail: (1) There is nothing in the record of this case to contradict the Carrier's assertion that it has pursued a practice in the past of renting and leasing automotive and work equipment prior to September 25, 1964, and more recently has accelerated the practice by "fleet leasing" of automotive cars and small trucks. The Leasing Contract with Interstate Vehicle Management, Inc. (IVM) which covers the car involved in the instant claim, is dated February 28, 1964 (Carrier Exhibit "A") and it refers, in Paragraph 1, to a Schedule which the parties executed on October 23, 1963. This evidence is conclusive that the Carrier had antecedent leasing and rental arrangements pertaining to automotive equipment; (2) Despite the antecedent arrangements whereby the Carrier obtained and used a considerable number of leased vehicles, there is no record of any established practice or articulated rule whereby the cognizant employees enjoyed contractual rights to repair or maintain these leased vehicles, and conversely,
 if outside firm employees serviced or repaired these leased units, this laid -
 the ground for the successful prosecution of claims by the affected Carrier
 employees. The record reveals that only one claim (MCR-152-77), comparable to
 the instant claim, filed prior to September 25, 1964, was successfully prosecuted
 by the Claimant. Since one of the principal reasons for the Carrier entering
 into leasing arrangements was to obviate the necessity of having to maintain and
 service automotive units, there should have been a host of claims filed by the
 Organization when the Carrier returned these leased units to the Lessor for re
 pair and service. The record, however, is boreft ^f s:;rb R ShozinS: A~arf I4'·=. 3
 cites only one claim allegedly comparable to the instant claim, but the Carrier
 stated that it was paid because of "extenuating circumstances" which were well
 known to the Organization at the time of the settlement of the claim, namely,
 that the Lessor repaired the leased unit on the property of the Carrier. With
 regard to the other two claims cited by the Organization, the Neutral Member
 finds them distinguishable from the instant claim. These two claims did not
 involve work on automotive equipment but pertained to heavy work equipment for
 which there were no readily available Lessor facilities for servicing and re
 pair work which necessitated the Carrier undertaking this work. But even if
 the Neutral Member were to grant the full weight to these three claims, it is
 doubtful whether it could be held that there was an established bractice or articu
 lated rule, in light of the volume of work, giving the Carrier's motor car
 mechanics a contractual right to perform repair and maintenance work on leased
 equipment not owned by the Carrier, prior to September 25, 1964; (3) The Neutral
 Member finds that the Organization taa no contractual right to perform the work prior
 to September 25, 1964 and further that no such right was garnered by the execution
 of the September 25, 1964 Agreement. There is nothing contained within the four
 corners of the September 25, 190'4 Agreement, or for that matter, in the Report
 of Emergency Board No. 160, that would suggest the 1964 Agreement placed a pro
 hibition or limitation upon the Carrier from continuing its prior practice of
 leasing, automotive equipment without incurring any new contractual responsi
 bilities toward its motor car mechanics regarding the repairing of servicing
 of leased equipment not owned by the Carrier. It is a reasonable assur:ption
 and consistent with the canons of construction pertaining to written documents
 that, if the parties to the September 25, 1964 Agreement wanted to curtail or
 prohibit the Carrier's established practice of leasing automotive equipment
 without being contractually liable for the repair and servicing of these leased
 units, that they would have so stated it in the said Agreement and not left this
 Case No. 74 - 7 - jQ,g X70 Award No. 63

 important matter to inference or conjecture. The Neutral Member must hold that, on a matter so vital as the Carrier's right to make capital investments - a matter that is not normally within the purview of scope of collective bargaining - it must be dealt with in the Agreement explicitly and cannot be gleaned by inference or implication. The Neutral Member finds that whatever evidence there is in the 190'4 Agreement relating to the leasing of equipmcnt, it tends to indicate that the Carrier's past practices were not banned or limited. In Article I, Section 2(d), for example, it states that employees adversely affected by the leasing of equipment which is to be serviced by the Lessor shall be entitled to the protective benefits of the Washington Job Protection Agreement. It is therefore entirely reasonable to deduce from this cited language that the parties to the 1964-Agreement did not intend to ban or limit the heretofore existing leasing practices, but only subject it to the protective provisions described in Article I. It is also quite clear from reading the 1964 Agreement that the parties were quite capable of limiting or proscribing, if they so wished, a practice like "subcontractinc." The Neutral must therefore assume that they could have done the same with regard to "leasing." This is the principal error of Award No. 3, namely, its finding that existing leasing or rental practices were proscribed by the 1964 Agreement unless the terms of the Agreement expressly pennitted them. In the first place Article I, Section 2(d) strongly sug.-ests that the practices were not banned, but even if the Agreement did not contain Section 2(d) language, the weight of construction of the given dociL~ent would have to be that an existing and important business practice, must be deemed to be continued, unless it is barred or limited by express terns and provisions of the Agreer,-ant; (4) Lastly, the Neutral Member must hold that, in the lexicon of collective bargaining and industrial relations, the practice of leasing or renting equipment is not Considered to be "subcontracting" and therefore this practice would not be within the ambit of Article II of the 1964 Agreement. In nrd=r for the Carrier to be able to engage in "subcontracting" it first must legally o-.m, or have dominion over, the subject matter of the "res" of the subcontract.- The Carrier cannot legally subcontract a vehicle to which it has not title. To do this it must have the express consent of the Owner-Lessor. The Leasing Agreement denies the Carrier-Lessee this very right. It is obvious that one of the prime purposes. for the Carrier negotiating a Lease Agreement was to be able to avoid having to service and maintain vehicles which it was using in its operations. The Organization's contention would nullify the Carrier's objectives without any clear language to that end. The Neutral Member will admit that under certain circumstances leasing arrangements might have adverse effects on e;ffoloyment opportunities of motor car mechanics. But if the parties in interest want to cope with that contingency, they must do so specifically and by direct negotiations. They cannot ban, or find banned, an existing and established practice by inference or seeking a tenous construction of contract language.





                              ~tQ~nJY~n~7


                      Neutral Member


    Carrier Members - Labor Members

                                    S.B.A. No. 570

                                    Awards Nos. 63 & 64

                                    Cases Nos. 74 & 75


            SPECIAL BOARD OF ADJUST?PENT N0. 570


                  ESTABLISHED UNDER


              AGREE?PENT OF SEPTEMBER 25964


            DISSENTING OPINION OF MPLOYEE MEMBERS TO


                  AWARDS 63 AND 64


Based upon the Findings contained in Awards Nos. 3 and 42 of Special
 Board of Adjustment No. 570 involving identical disputes between the
 same parties and the reasoning set forth in the Employee Members' Con
 curring Opinion to Award No. 3, it is apparent that the findings and
 conclusions of Awards Nos. 63 and 64 are ill-advised and do violence to
 the spirit and purpose of the agreements. The majority should have
 followed Awards 3 and 42 and, therefore, with finality, put to rest
 .-t;;, :~rri~..i~r icc~ir pr. Yhi~ -ty

 For the reasons stated, we dissent.

                        Jam, ~~Yost


                        Richard E. Martin


                        Labor Members of Special Board of Adjustment No. 570.


November 27, 1967.

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