[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Notices]
[Pages 70116-70118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32475]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 29430 (Sub-No. 21)]
Norfolk Southern Corporation--Control--Norfolk and Western
Railway Company and Southern Railway Company (Arbitration Review)
ACTION: Request for comments.
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SUMMARY: The Transportation Communications International Union
(TCU) has filed with the Board an appeal of an arbitration panel's
decision holding that the Norfolk Southern Railway Company (NSR) is not
required to pay displacement allowances to claimant employees after (1)
their work was transferred to a new location as a result of the
railroad consolidation that created NSR and (2) they exercised their
seniority rights to take lower paying jobs at their current locations
rather than follow their jobs to the new location. We are requesting
comments from the public to develop a more complete record on the
fundamental issue raised here concerning displacement allowances under
our labor protective conditions imposed in rail consolidation
approvals.
DATES: Comments are due by February 14, 2000. By March 14, 2000, TCU,
NSR, and intervener, Brotherhood of Maintenance of Way Employes, may
file replies to the comments.
ADDRESSES: Send an original and 10 copies of comments referring to STB
Finance Docket No. 29430 (Sub-No. 21) to: Surface Transportation Board,
Office of the Secretary, Case Control Unit, 1925 K Street, N.W.,
Washington, DC 20423-0001. In addition, send one copy of comments to
the representatives of TCU and NSR and to intervener, Brotherhood of
Maintenance of Way Employes:
Mitchell M. Kraus, Christopher Tully, Transportation
Communications International Union, 3 Research Place, Rockville,
Maryland 20850
Jeffrey S. Berlin, Krista L. Edwards, Sidley & Austin, 1722 Eye Street,
N.W., Washington, DC 20006
Donald F. Griffin, Brotherhood of Maintenance of Way Employes, Suite
460, 10 G Street, N.E., Washington, DC 20002
FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600.
[TDD for the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION:
By this notice, we are requesting public comments on issues
presented by the record on the appeal of an arbitration award issued by
a panel chaired by neutral member William E. Fredenberger, Jr. (the
Award).
Background
In Finance Docket No. 29430 (Sub-No. 1), Norfolk Southern Corp.--
Control--Norfolk & W. Ry. Co., 366 I.C.C. 173 (1982), our predecessor
agency, the Interstate Commerce Commission (ICC), approved the railroad
consolidation that resulted in the creation of NSR. This consolidation
was approved subject to the standard labor protective conditions
established in New York Dock Ry.--Control--Brooklyn Eastern Dist., 366
I.C.C. 60, 84-90 (1979) (New York Dock), aff'd, New York Dock Ry. v.
United States, 609 F.2d 83 (2d Cir. 1979). Under New York Dock, labor
changes related to approved transactions are implemented by agreements
negotiated before the changes occur. If the parties cannot agree on the
nature or extent of the changes, the issues are resolved by
arbitration, subject to appeal to the Board under our deferential Lace
Curtain standard of review.\1\ Once the scope of the necessary changes
is determined by negotiation or arbitration, employees adversely
affected by them are entitled to receive comprehensive displacement and
dismissal benefits for up to 6 years.
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\1\ Under 49 CFR 1115.8, the standard of review is provided in
Chicago & North Western Tptn. Co.--Abandonment, 3 I.C.C.2d 729
(1987), aff'd sub nom. IBEW v. ICC, 826 F.2d 330 (D.C. Cir. 1988)
(Lace Curtain).
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As a recent initiative in continuing to carry out that
consolidation, NSR developed a plan to coordinate and to centralize
certain crew calling functions performed at various locations
throughout the merged system into a Crew Management Center located in
Atlanta, GA. On July 3, 1996, the carrier and TCU reached an agreement
to implement this plan (the Implementing Agreement).\2\ On May 13,
1997, NSR notified TCU of its intention to transfer work in accordance
with the Implementing Agreement. Specifically, the carrier announced
that crew calling work performed on the Tennessee Division at
Knoxville, TN, would be transferred to the Atlanta Crew Management
Center. Positions would be abolished at Knoxville and similar positions
would be established in Atlanta. On July 21, 1997, the carrier
announced a similar transfer of work from the Kentucky Division to the
Atlanta Crew Management Center.
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\2\ TCU submitted the Implementing Agreement in pages 8-15 of
Exh. 9 of its submission to the arbitration panel.
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Claimants worked on the Tennessee and Kentucky Divisions before
their positions on those divisions were abolished. Claimants were
offered similar positions in Atlanta, carrying the same rate of pay.
Acceptance would have required claimants to change their residences to
Atlanta. Rather than move to Atlanta, the claimants exercised seniority
under their collective bargaining agreement to obtain positions on the
Tennessee and Kentucky Divisions that carried rates of pay that were
less than the rates in Atlanta, but that did not require them to move.
Claimants subsequently requested displacement allowances under New
York Dock in order to recoup the difference between (1) the salaries
they received on those divisions for the year before their positions
were abolished and (2) their reduced salaries on the
[[Page 70117]]
Tennessee and Kentucky Divisions. The carrier denied claimants'
requests, arguing that employees who accept lower paying jobs in their
current locations rather than following their work to a new location,
which would have paid them at the same level as they were previously
compensated, are ineligible for displacement allowances under New York
Dock. TCU then took the issue to arbitration under Article I, Section
11 of New York Dock.
The arbitration panel ruled that claimants were not entitled to
benefits under New York Dock. The panel based its decision on two
grounds: (1) that benefits were precluded by a footnote in a prior
Board decision; 3 and (2) that claimants were not
``displaced'' employees under New York Dock because their displacement
resulted from their refusal to follow their work rather than from the
transaction that created NSR. 4 The employee member of the
panel dissented from this ruling but did not issue a separate opinion.
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\3\ The panel referred to the first sentence of note 10 of our
decision in CSX Corporation--Control--Chessie System, Inc., and
Seaboard Coast Line Industries, Inc. (Arbitration Review), STB
Finance Docket No. 28905 (Sub-No. 28) (STB served Sept. 3, 1997),
where we stated: ``The ICC has in the past referred to the
fundamental bargain underlying the Washington Job Protection
Agreement of May 1936 (WJPA), upon which the New York Dock
Conditions are based, as being that an employee must accept any
comparable position for which he or she is qualified regardless of
location in order to be entitled to a displacement allowance.''
\4\ In particular, Article I, Section 1(b) of New York Dock
provides the following definition: ``(b) `Displaced employee' means
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.''
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TCU filed an appeal of the panel's Award. The Brotherhood of
Maintenance of Way Employes (BMWE) filed a petition to intervene and
tendered a separately filed brief in support of TCU's
appeal.5 NSR replied in opposition to TCU's appeal and
BMWE's petition.
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\5\ BMWE argued that we must vacate the Award for the reason
that neutral member William E. Fredenberger, Jr., was convicted of
tax evasion in federal court in April 1999. BMWE also argues that
the TCU claimants are lawfully entitled to benefits under New York
Dock as displaced employees and should receive them as a matter of
sound policy.
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In a separate decision served contemporaneously with the
publication of this notice, we granted BMWE's petition to intervene,
denied a motion by NSR to reject part of BMWE's evidentiary submission,
and denied BMWE's motion to disqualify Arbitrator Fredenberger.
Comments and Information Requested
Overview
Under our Lace Curtain standard of review, we do not review issues
of causation, the calculation of benefits, or the resolution of other
factual questions in the absence of egregious error. As opposed to
those types of issues, TCU presents a fundamental question of
interpretation of our New York Dock labor protective conditions.
Specifically, TCU argues that the Award fails to draw its essence from
the New York Dock labor protection conditions by denying claimants a
displacement allowance for exercising their seniority to take lower
paying jobs in their current locations to avoid having to move. This
question goes to the heart of the New York Dock bargain of allowing
railroads to implement approved consolidation transactions while
providing a level of protection to adversely affected employees.
Accordingly, we will hear the appeal brought by TCU.
This appeal raises a major issue concerning the interpretation of
our New York Dock conditions, that is, whether employees whose
positions are abolished as a result of a New York Dock-conditioned
transaction may receive a displacement allowance when they exercise
their seniority to take lower paying positions at their current
locations rather than following their work to new locations established
as a result of the transaction. The record currently before us
indicates that some in the rail industry have interpreted this issue
one way while others have interpreted it the other way. The resolution
of this issue appears to have an impact reaching beyond the original
parties to this proceeding. Thus, we are seeking additional comments to
supplement the record.
To keep the delay caused by our procedure from unduly harming
employees if they are ultimately found eligible for displacement
allowances, we propose to award interest on any sums owed, calculated
from the date that any compensation should have been paid. See
Burlington Nor., Inc.--Cont. and Mer.--St. L.-San Fran. Ry. Co., 6
I.C.C.2d 351, 355-56 (1990). The rates of interest would be determined
and compounded as provided in 49 CFR part 1141.6
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\6\ See Procedures to Calculate Interest Rates, 9 I.C.C.2d 528
(1993).
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We are also aware that rail labor and rail management have been
engaged in private discussions regarding labor issues related to Board
approval of railroad consolidations. If any agreements that are reached
pursuant to those discussions, or the discussions themselves, have
relevance to what we are doing here, the parties are invited to advise
us of the effect, if any, of those agreements or discussions on the
case before us.
Issues Raised by the Parties
Appearing below is a summary of what we believe to be the most
important issues raised by the parties and the questions or sub-issues
arising out of these issues. This list is not intended to be exclusive.
Commenters are invited to discuss any other issues and to submit
evidence bearing on them.
Article I, Section 1(b)
Article I, Section 1(b) of New York Dock, 360 I.C.C. at 84,
provides the following definition of a ``displaced employee':
(b) ``Displaced employee'' means 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.
NSR argues that claimants are ineligible for displacement
allowances because they are not displaced employees under this
provision, and that any displacement was voluntary in that they could
have followed their work to its new location in Atlanta. TCU argues
that claimants are displaced employees because their pre-transaction
jobs were abolished and they were unable to exercise their seniority to
obtain jobs with the same pay at their current locations. We seek
comments on the proper interpretation of this provision.
Article I, Section 5(a)
TCU and NSR seem to agree that an employee may not receive a
dismissal allowance if the employee refuses both to follow his or her
work and to exercise any of his or her prior seniority rights at
all.7 TCU's position, however, is that New York Dock
provides different rules for dismissed employees and displaced
employees and that preserving seniority is an important consideration
in the granting of displacement allowances. TCU relies on the following
language in Article I, Section 5(a) of New York Dock, which provides in
pertinent part as follows:
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\7\ See TCU's Petition, at 3 and 10 n.4.
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5. 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
[[Page 70118]]
compensation equal to or exceeding the compensation he received in the
position from which he was displaced, he shall, during his protected
period, be paid a monthly displacement allowance. * * * [Emphasis
added.]
Relying on the language emphasized above, TCU argues that an
affected employee has a right to the ``normal exercise of his seniority
rights'' and that the definition provision of Section 1(b) does not
void this right.
TCU's approach raises various subsidiary issues. Is this provision,
with its reference to the exercise of seniority rights, intended to
trump the general definition of ``displaced employee'' in Section 1(b)
in determining when displacement allowances may be awarded? What is
meant by the ``normal exercise'' of seniority rights under ``existing
agreements, rules and practices''? Does this require observance of pre-
transaction agreements, rules and practices? Or does the language refer
to post-transaction arrangements that are negotiated or arbitrated to
carry out the transaction at issue?
In its submission to the panel at 15-16, NSR responds by citing the
ICC's refusal to modify Article I, Section 5(a) of New York Dock so as
to insert the following phrase between the words ``position'' and
``producing': '', which does not require a change in his place of
residence,'' (see note below).8 We ask for comments on the
import of this item. Does it support the proposition that there is a
duty to relocate in every situation, or does it establish merely that
an employee must relocate only if it is necessary for the employee to
find a new job ``in the normal exercise of his seniority rights under
existing agreements''?
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\8\ If this change had been adopted, Section 5(a) would have
read as follows (proposed addition underscored): ``5. 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, which does not require a change in his place of residence,
producing compensation equal to or exceeding the compensation he
received in the position from which he was displaced, he shall,
during his protected period, be paid a monthly displacement
allowance. * * *'' [Emphasis added.]
The language was rejected by the ICC in the 1978 decision in New
York Dock, 354 I.C.C. 399 (1978).
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Article I, Section 5(b)
TCU also cites Article I, Section 5(b) of New York Dock, which
provides a special restriction on the award of displacement allowances.
Under this provision, an affected employee does not receive an
allowance if he or she refuses to take another position that pays more
and that does not require a change of residence.9 This
provision raises the question of why the drafters of New York Dock and
its predecessors would have carved out such a narrow class of employees
who would be ineligible for displacement allowances, specifically
mandating that the promotion not require the employee to relocate, if
they had intended to deny allowances to everyone who refuses to follow
his or her work for whatever reason.
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\9\ The language of this provision does not ``deny'' a
displacement allowance but provides that the employee will be
treated as ``occupying the position he elects to decline.'' The
effect on the employee appears to be the same (no payments).
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The Implementing Agreement
During the arbitration, TCU alleged that the Implementing Agreement
ensures that employees assigned to the Atlanta Crew Management Center
may exercise their pre-transaction seniority rights to avoid moving to
Atlanta. TCU cited Article III of the Implementing Agreement. Also,
Article II, Section 5 of the Implementing Agreement allows affected
employees to bid for positions under ``former seniority roster(s).''
These provisions are silent, however, as to whether this means that
employees may always exercise their seniority rights as they choose
without risking loss of compensation under New York Dock. What is the
effect of these provisions?
Merger Efficiencies and Effects on Employees Under New York Dock
NSR argues that TCU's approach would effectively negate many
operating efficiencies of railroad consolidations. The carrier asserts
that TCU's approach would create unprecedented chains of bumpings and
displacements, with each employee in the chain receiving a displacement
allowance.
We seek comments on NSR's position on this issue. Would TCU's
approach actually create unusual chains of bumpings and displacements
or a need for carriers to hire extra employees when affected employees
displaced junior employees without relocating? Have such results been
avoided in practice for various reasons? 10 Evidence
pertaining to actual practice on NSR and throughout the rail industry
would be helpful in answering these questions. Even if NSR's position
is valid in other contexts, can NSR claim that the economies of the
merger would be destroyed here in view of its apparent agreement in the
Implementing Agreement that affected crew calling employees may
exercise prior seniority rights?
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\10\ Has the effect on carriers typically been mitigated through
practices such as the dismissal or relocation of junior employees
who were unable to displace anyone, carrier elimination of the
positions into which the employees chose to displace rather than
move, or the creation of new positions to stop chains of bumpings?
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Industry Practice Under New York Dock
TCU and BMWE submit statements from union officers alleging that
common rail industry practice has been for carriers to grant
displacement allowances to employees seeking to exercise their
seniority to take lower paying positions in their pre-merger seniority
districts. NSR does not dispute these statements insofar as they apply
to practices of other railroads, but responds that its own practice has
been to deny displacement allowances in this situation.
We seek more definitive information as to the extent to which
carriers have granted displacement allowances to employees who have
exercised their seniority to take lower paying positions rather than
following their work to locations that would require them to move.
Especially useful would be examples of implementing agreements,
testimony about specific situations where displacement allowances may
have been granted in this situation with or without the need for
arbitration, and testimony from knowledgeable industry and labor
officials about general practice.
Arbitration Precedent
In the case before us, employees affected by a transaction
exercised their pre-transaction seniority rights to take lower paying
jobs at their pre-transaction location rather than follow their work to
a new location where they had no seniority rights before the
transaction. Are precedents cited by the parties involving situations
where the employees affected by a transaction declined the opportunity
to move to accept jobs for which they did have seniority rights before
the transaction useful with respect to our consideration of the present
case?
Decided: December 8, 1999.
By the Board, Chairman Morgan, Vice Chairman Clyburn and
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-32475 Filed 12-14-99; 8:45 am]
BILLING CODE 4915-00-P
