Vivian Porretto, spouse of UTU member John Porretto (Local 597, Des Planes, Ill.), sent the following unsolicited comment to the International after reviewing with her husband the voting materials on the National Rail Contract, and making comparisons with other private- and public-sector workers whose paychecks are being frozen or reduced and whose health care insurance contributions and co-insurance are being increased significantly:
Wrote Vivian Porretto:
“To read the UTU website and thinking how people are questioning the health care package in this contract was just it for me.
“This is an amazing contract and everyone should be thanking you guys for working so hard to get it.
“To be able to pay only $200 a month for some of the best health care money can buy for years to come — that is unheard of. My son pays over $4,000 a year for family coverage for an HMO!
“Anyone who doesn’t think this contract is a great deal should ask a teacher in Wisconsin what happens when collective bargaining is prohibited and insurance contributions are increased.
The International has received questions regarding the health care provisions contained in the National Rail Contract.
The health care insurance plan provided by the National Rail Contract already provides one of the best benefits packages available – and the new contract provides enhancements in addition to the deductible and co-insurance changes.
Some members have focused on what they consider to be the “cons” of the new provisions. No collectively bargained contract delivers everything each side would like. In fact, the “pros” regarding health care in the National Rail Contract vastly outnumber and outweigh the “cons.”
* Employee health care contribution frozen at $200 per month through July 1, 2016.
* Reduction in co-pay for use of urgent care centers to $20.
* Reduction in co-pay for use of convenient care clinics to $10.
* Enhanced benefit for using “Centers of Excellence” for certain procedures.
* Annual deductible and co-insurance based on insurance company allowed charges and not the actual charges submitted by the in-network physician or hospital.
* 100 percent benefits on satisfying the annual out-of-pocket maximum.
* Radiology management procedures to be implemented to reduce redundant or unnecessary tests adding to health care costs with no penalty to the member if the required authorization is not obtained by the physician.
* Reduction in the cost of generic medication to $5 at both retail and mail service.
* Personalized Medicine to be established allowing for the proper medication at the proper dose the first time for specified illnesses.
* Pharmacist contact with physician to assure you are receiving proper medication at the most affordable price to you and the plan.
* You and your physician will have the final decision on medications.
* Establishment of annual deductibles and co-insurance for in-network services.
*Increase in the co-pay for brand name medications.
* Emergency room co-pay increased to $75.
To further assist in understanding the health care provisions in the National Rail Contract, here is a response to some of the myths raised:
MYTH: I will now have to pay $50 for cotton balls in the hospital under this proposal.
FACT: The annual deductible and 5 percent co-insurance you pay is on the allowed charges that the insurance company has negotiated with your provider. For example, the doctor charges $200 for a procedure and the allowed charge by the insurance company is $65. You would only pay $65 toward the annual deductible. If the annual deductible has already been satisfied, you pay only $3.25 as the 5 percent co-insurance up to a maximum of $1,000.
MYTH: Medco will dictate what drugs I will receive regardless of what my doctor prescribes.
FACT: Medco pharmacists will contact your doctor to discuss the medication prescribed and suggest alternative medications that can save you money without jeopardizing your health. The final decision on medications is made by you and your physician.
MYTH: Railroads are showing record profits and now is the time to get higher general wage increases and not give up anything in return. We must stand firm and fight. This is a bad deal.
FACT: The nation is facing the worst economic downturn since the Great Depression. Legislators at all levels of government are imposing wage and benefit concessions on union and non-union employees and passing laws that eliminate collective bargaining rights. The situation in this round of bargaining is nearly identical to that in 1996 when Arbitration Board No. 559 settled the UTU National Agreement. That arbitration panel ruled that the total economic picture is controlling, not just the railroads’ current economic situation at the time. (This decision is reprinted, below, in its entirety.)
The National Rail Contract provides a compounded general wage increase of 18.24 percent – and more than 20 percent when factoring in the certification pay. THIS IS A GOOD DEAL!
Arbitration Board No. 559 Decision from 1996:
BEFORE THE ARBITRATION BOARD Constituted Pursuant to a National Mediation Board Arbitration Agreement Made and Entered Into On April 16, 1996 By and Between CERTAIN CARRIERS REPRESENTED BY THE NATIONAL CARRIERS’ CONFERENCE COMMITTEE Arbitration Board and No. 559 CERTAIN OF THEIR EMPLOYEES National Mediation REPRESENTED BY THE UNITED Board TRANSPORTATION UNION (National Mediation Board Case Nos. A—12709, A—12710, A—1271l, A—12712 and A—12713) AWARD Oklahoma City, Oklahoma
May 8, 1996
This award is made in conformance with the Railway Labor Act pursuant to a voluntary arbitration agreement executed by certain carriers represented by the National Carriers’ Conference Committee (Carriers) and the employees of these Carriers represented by the United Transportation Union (UTU). That Agreement was executed on April 16, 1996, under the auspices of the Chairwoman of the National Mediation Board. A copy of the Arbitration Agreement is attached as Appendix “A.”
John B. Criswell, Robert 0. Harris, and Preston J. Moore were duly selected as members of the arbitration board. John Criswell was appointed to serve as Chairman of this Board. Such designa- tions and appointment were made in accordance with the Railway Labor Act and the terms of the parties’ Arbitration Agreement.
The UTU represents approximately 40,000 conductors, brakemen, switchmen, engine service personnel and yardmasters, or about 27% of the total number of employees represented in this round of national bargaining involving the Nation’s freight railroads.
The railroad companies in this dispute are represented by the National Carriers’ Conference Committee.
On November 1, 1994, the NCCC, in accordance with Section 6 of the Railway Labor Act, served notice on the UTU of their demands for changes in the collective bargaining agreements. The UTU responded with their notices beginning in mid-November, 1994, and continuing thereafter for some time.
The first formal meetings occurred on December 14—15, 1994. After several months of negotiations, both parties applied to the NNB for its mediatory services, the tJTU on March 3, 1995, and the Carriers on March 10, 1995. The applications were docketed as NNB Case Nos. A—12709, A—l2710, A—12711, A—12712, and A—12713.
Staff mediator Samuel J. Cognata was initially assigned to mediate this dispute. NNB Chairwoman Magdalena Jacobsen ultimately joined the mediation efforts. They met with the parties on numerous occasions throughout the following year. On December 1, 1995, after a great deal of hard and intensive negotiations, the Carriers and the UTtJ reached an agreement (December 1995 Agree- ment).
The December 1995 Agreement was placed before the appropriate UTU constituencies for approval. The Agreement was approved by a practically unanimous vote of the General Chairmen. However, when submitted to the membership, the agreement was rejected.
In view of the fact that both parties use the December 1995 Agreement as their departure point, albeit in different directions, a brief description of that agreement seems appropri- ate.
The term of the December 1995 Agreement covers the 5 year period beginning January 1, 1995 and ending December 31, 1999. Wage adjustments and a guaranteed COLPJ generate a minimum increase of 14.3% over that period. All the wage adjustments were applica- ble to overmiles, unlike the past two national agreements. A continuing COLA at the end of the agreement, similar to the last round, also was included. The pact provides for periodic health and welfare offsets similar to the previous round’s agreement except that the amount offset is cumulative from year to year, as opposed to the one shot annual offset in the last agreement.
Insofar as fringe benefits are concerned, the December 1995 Agreement essentially called for no change in the national health benefits plan, deferred improvements in the national dental plan and established, in 1999, a national vision plan. While benefits under the health plan were not changed, eligibility for benefits was tightened. Similarly, vacation eligibility service requirements were raised. Several vacation plan improvements were agreed to as well.
As to rules changes, UTU obtained certain flowback rights for engine service personnel, enhanced employment opportunities in certain line sale transactions, greater work opportunities for employees on terminal companies, a seniority accumulation require- ment, and an opportunity tied to promotion to expedite the rate progression timetable. In addition to a comprehensive moratorium, as provided in the previous round, the Carriers obtained a displacement rule change that accelerated certain employee mark up obligations upon returning to work, and an enhanced customer service rule that offered the promise of tailoring rail service to specific customer needs. Finally, the parties agreed to establish a Wage and Rules Panel 2000 which would study and make recommenda- tions concerning various pay and work rules.
On April 15, 1996, the NNB, in accordance with Section 5, First, of the Railway Labor Act, offered the parties the opportuni- ty to submit their dispute to arbitration. The UTU accepted the NNB’s proffer of arbitration on April 15, 1996, and the Carriers accepted it later on the same date. On April 16, 1996, the parties executed an Arbitration Agreement pursuant to which this Board was created.
The Board commenced hearings on April 30, 1996. The hearings continued on May 1 and 2, 1996. The hearings were held in Washington, D.C. The parties were given full opportunity to present positions, oral testimony, and documentary evidence. The transcript of the proceeding consists of 241 pages. The tJTU submitted statements of position on the issues that included four volumes of supporting exhibits and two addendums. The Carriers submitted 18 exhibits. The parties’ collective submissions to this Board amounted to some six feet of paper.
After a full consideration of the evidence and arguments of the parties and upon the entire record, the Arbitration Board makes the following findings and Award.
DISCUSSION AND FINDINGS OF THE BOARD
The Board approaches its task mindful of the extraordi- nary set of circumstances that makes its determinations so critically important. Every round of bargaining in the rail industry and every dispute that comprises a round affects the vital interests of many groups. Here, however, in addition to the traditional considerations, there are other important factors.
As we look to the immediate past, we are reminded that rail labor and management are recovering from a round of substantial acrimony that required Congressional imposition of settlements for most of the rail unions, including the tJTU. As we look ahead, we recognize that there is no formal agreement yet in place with respect to this round of national bargaining (although one agreement is currently out for ratification). And, finally, as we focus on this particu- lar dispute, we observe an unprecedented set of negotiations: informal as well as formal talks, leadership changes, and not the least, two rejected agreements.
Thus, the impact of this Award and its obvious effect on those that are formally parties to the proceedings, and those that are not, require the exercise of the greatest of care in fashioning our conclusions. We begin by assessing the positions advanced by the parties.
A. The UTU Position
The UTU has reviewed the bargaining history and the ratification results, and concluded that what is needed is more in the way of money and less in the way of rules relief. Rather than 14.3% (compounded) in general wage increases and 7.5% in lump sums as called for in the December 1995 Agreement, the UTU now says that the agreement is the “springboard” and the employees it represents should receive 21% (non—compounded) over three years in general wage increases. As to rules, the reverse psychology applies.
While the December 1995 Agreement provided relief with respect to displacement, customer service adjustments, and eligibility requirements for vacation, dental, and health and welfare benefits, the tJTU proposes that all those items be dropped, including the commitment to establish a National Panel to consider comprehensive restructuring of the entire pay and rule system.
The justification for these revisions is twofold, (1) that is what it will take to satisfy the needs of the members, and (2) the Carriers’ record profits permit greater sharing with UTU employees.
The organization might be right as to what its members want. Whether it is right to give them that is another question. We believe it is not enough to simply claim “more” and be rewarded with more. Good faith bargaining is put at risk by rewarding employees with greater gains for simply saying “no.” The automatic rejection of agreements reached by experienced and elected organization representatives without further justification is a destructive practice that cannot be tolerated. We may disagree with the Carriers’ remedy in these circumstances, but we do agree with the Carriers that a rejection of an agreement without any persuasive explanation is unacceptable.
The organization responds by saying that the justifica- tion for greater increase lies in the record profits reaped by the industry over the last several years, especially last year. The organization’s witness analyzes the financial reports and the economic data and advises that the fortunes of the industry have never been better: net income is at a record high; earnings are up all over; operating ratios continue to fall; earnings per share are escalating; return on investment could not be better; etc.
On the other hand, the Carriers presented an imposing array of figures as well, all warning that whatever financial gains have occurred, and they have occurred, they have been modest at best. They point out that even with the so—called “success,” the industry lags behind levels of profitability routinely found elsewhere. Furthermore, competition from trucks and other modes continues to exert incredible pressure on prices, capital demands soar unrelentingly, etc.
We think that before jumping into this thicket, we are better off to step back and ask ourselves, what will the exercise gain us? We do not think that “bigness” alone or profits by themselves are persuasive reasons for recommending wage increases. If that were so, the biggest company in the country should have the highest wage rates for its employees. But that is not the case, and it is not the case because it makes no sense.
That is not to say that where employees’ wages are suppressed for a period of time, due in part to poor financial returns, a union cannot argue for wage hikes when financial good health returns. But, insofar as the rail industry is concerned, there is no such argument available. The facts are to the contrary. Rail employees enjoy a significant advantage over employees in other industries. That conclusion stands whether one analyzes wage trends, wage levels, or total compensation, compares competitors such as truck, other transportation modes, or industry generally. The figures are in the record, and they are unassail- able. As to employees represented by the UTU, as opposed to railroad represented employees generally, the conclusions are identical. The only difference is that the differences are greater.
Thus, in our view, the union’s claim that current profit levels justify greater wage increases does not fly.
B. The Carriers’ Position
Unsurprisingly, the Carriers’ analysis of the post ratification tea leaves is just the opposite. Simply said, the Carriers urge more work rules relief and less money. The support- ing arguments, broadly stated, are that the rejection of the December 1995 Agreement and the organization’s subsequent actions demand no less than a merits analysis of all issues. Compromise and delay via referral to a Wage and Rules Panel are no longer tolerable. And as to the merits, the Carriers are entitled to significant relief on a large number of pay and work rules and entitled to that relief immediately. Insofar as wages are concerned, the union should accept less than the December 1995 Agreement for a number of reasons, not the least of which is that delayed implementation of the Carriers’ quid — rules relief, justifies diminishment of the union’s quo — the wage increases. To do otherwise, argue the Carriers, is to reward the organization and its membership for failing to live up to its responsibilities. The Carriers argue that this practice must be stopped, that the membership be taught a lesson, and the only way to have the message understood is to hit them where it hurts —— in the pocketbook.
The Carriers’ message has some appeal. After all, history is filled with Commission Reports that analyzed pay and work rules and recommended substantial change. Yet, the results often were to toss the analysis into the trash bin or to make only the most modest adjustments. Similarly, the Carriers’ concern with deterioration of the process is a real one and as we commented earlier, one that must be addressed. However, as we spell out in more detail later, our difficulty with the Carriers’ recommenda- tions is that they are not warranted in these circumstances. That is harmful in itself. It is even worse at this point with a BLE agreement out for ratification. And prospects for other agreements would be undermined as well.
C. The Board’s Award
Having rejected the positions advanced by the parties, we come to where our instincts have told us all along we should be. That is, to endorse in substance the parties’ December 1995 Agreement. We do so for a number of reasons.
We first look at the agreement itself and ask ourselves whether it is a fair and reasonable settlement. Both on an overall basis and as to important key provisions. We think this test is met in every respect. It is fair and reasonable. it provides satisfactory wage increases, a mixture of general wage increases and lump sums, that will exceed that received by most American workers and satisfies legitimate expectations. it follows as well a generous last year increase in the 1991 Implementing Agreement of a 4% July 1, 1994 general wage increase and a 2% January 1, 1995 lump sum adjustment. It also addresses certain key needs identi- fied by the union, such as flow back rights, greater work opportu- nities for employees confined to rosters of terminal companies, and an accelerated entry rate schedule.
For the Carriers, wages are generous but not excessive. Rules relief is provided in an immediate sense by revisions in the displacement obligations imposed on employees returning to work and the modest increases in eligibility requirements for the health and dental plans, as well as vacation benefits.
Employees gain as well through maintenance of a generous health benefits program with the most modest of employee cost sharing arrangements. A new vision plan as well as an expanded dental program provide a generous benefits package.
In the long run, further improvements may come from the Wage and Rules Panel. The parties had committed themselves to a serious and comprehensive analysis of pay and work rules, and we are persuaded to take them at their word.
Having concluded that the agreement is fair and reason- able insofar as the parties are concerned, but recognizing the precedent the agreement carries with respect to the remaining rail negotiations, we must ask ourselves whether the agreement is fair and reasonable in that context. We think so. We have looked at the agreement in terms of how it compares with respect to industry generally, not just with UTU employees. The answer is the same. It does compare favorably.
In fact, there is no other answer. In light of the BLE ratification effort, we find that to recommend more or less would be destabilizing at best and potentially destructive to this entire round of bargaining. In addition, portions of this agreement developed in discussions with other operating and non—operating groups and found their way into the December 1995 Agreement. In short, we find the agreement reached by the parties to be fair and reasonable in all respects. Given that, we must respect what the parties have done and endorse the December 1995 Agreement. Nothing has changed since the agreement was made except for the non- ratification. There is no warrant for less favorable treatment of employees because of their vote. It is enough to adopt the same terms their leaders found acceptable.
Secondly, there are precedents within this industry, including this organization. We cite several as examples of the many. Only a decade ago the UTU rejected in its ratification process a tentative national rail agreement. At that time, the fireman—manning issue was identified as the offending provision. The dispute was submitted to an Emergency Board, as opposed to an Arbitration Board. The Emergency Board reaffirmed the parties’ tentative agreement with little in the way of change.
An even more recent industry precedent is Arbitration Board Award No. 458. That Board endorsed a tentative agreement reached in national negotiations between the Brotherhood of Locomotive Engineers and the NCCC. There, after reviewing all the arguments the BLE advanced as to why the rejected agreement should be substantially revised, the Board was not persuaded to stray from the parties own efforts. In summarizing, it said:
“In short, the realities that confront this Board permit no other conclusion.” (Arbitra- tion Board No. 458, Award, p.8)
Although that answer applies here as well, the Board does not stop its analysis here. Rather, the Board also grounds its opinion on some very important considerations it believes are vital if collective bargaining in this industry is to prosper. As contrasted to our other reasons, it is more ephemeral but no less important.
It originates in the observations we noted as to the efforts both parties have made to overcome the bitterness of the last round and to restore vigor to the collective bargaining process. It can truly be said that this round began not with the service of formal notices in November, 1994, but more than a year before that date when informal talks first began.
This effort not only survived leadership changes but was nourished by them. The new UTU team brought with it a determina- tion to depart from the easy but unproductive ways so often taken in the past of letting others resolve the issues and take the blame. The agreement of the parties contains numerous examples of subjects being addressed and solutions fashioned. It contains as well a new—found commitment to continue this effort through the Wage and Rules Panel.
We marvel at the remarkable turnaround this revitaliza— tion has had already on the policy making body of the UTU -— its General Chairmen. We contrast their response to the 1994 Denver Agreement with the 1995 December Agreement. A change of that magnitude -— from almost complete opposition to practically unanimous support —- is not in our view solely attributable to the extra dollars or other adjustments. It signifies something far more fundamental.
We accept the fact that there are those who would point to the membership rejection and the Carriers’ clamor for immediate and comprehensive rules relief as more accurate predictors of future behavior. That may be the case. There have to be serious concerns when the industry significantly improves its profitability and the union membership rejects a contract that both provides wage increases above the national norm and preserves their work rules. And concerns as to inequities are bound to rise when executive compensation soars, profits multiply, but employment levels plummet and legitimate needs of workers are ignored.
While that case can be made, we do not believe it will happen here. We do not share the view that this is a permanent fork in the road leading to labor disarray. We think that the rank and file is capable of understanding the leadership’s determination to solve the problems of the workplace, not leave it to others. We do not dismiss lightly our concerns with membership rejection generally. Those concerns become acute here in view of the UTU leadership’s success in the negotiations and preparations for ratification.
We are confident that both parties are determined to address their problems and reach solutions on their own. The tentative agreement is an example of that. We believe the parties’ creation needs nurturing, not second guessing. We cite with approval comments of some distinguished colleagues in a recent airline interest arbitration case. In responding to a position advanced by one party, the Board stated:
“Interest arbitration, bound as it is to existing norms, is an inherently conservative process. Rarely will a party be able to convince an interest arbitrator to make major ‘innovative’ changes in the status quo, re- gardless of their merit.” (American Airlines and APFA, Interest Arbitration Award, October 10, 1995, pp. 54—55)
This Board, too, believes that these issues should be negotiated by the parties. And, here, that is the case. The parties worked hard and successfully. They forged an agreement. They had the courage to make the lead settlement. They reached an agreement expeditiously, some three months after the current UTU leadership took office. And they had the determination to make an agreement without government intervention. They are entitled to their successes.
1. The request of the Carriers dated November 1, 1994, a copy of which is affixed to the Arbitration Agreement as Exhibit B and all other proposals advanced during mediation or before this Board, are denied in their entirety except as otherwise provided in paragraph 3.
2. The request of the United Transportation Union dated on or after November 16, 1994, a representative copy of which is affixed to the Arbitration Agreement as Exhibit C, and all other proposals advanced during mediation or before this Board, are denied in their entirety except as otherwise provided in paragraph 3.
3. The tentative 1995 agreement, understandings, and attached letters, with certain modifications that are due to the passage of time and the issuance of this decision, are confirmed as our Award. A copy of such agreement and such letters that include these changes is affixed hereto as Appendix D and shall constitute in its entirety this Board’s Award. This Board hereby finds that its Award constitutes a full and complete response to the specific questions submitted to it.
4. The Award shall become effective on the date issued and shall remain in effect in accordance with its terms until changed pursuant to the provisions of the Railway Labor Act.
5. The Award shall be final and conclusive upon the parties to the Arbitration Agreement as to the facts determined by the Award and as to the merits of the controversy decided. The Award shall be applied in the same manner as if reached through agreement and signed in the parties’ customary manner.
Issued at a meeting of the Arbitration Board on May 8, 1996.
Voting packages for the tentative national rail contract were mailed Friday, Aug. 12, to UTU members eligible to vote.
The balloting period will extend for 21 days to 4 p.m., Eastern time, Friday, Sept. 2.
Voting will be by craft under the craft-autonomy provisions of the UTU Constitution. Crafts voting will be brakeman, conductor, engineer, fireman, yardman and yardmaster.
Members will vote based on the craft in which they worked on the day previous to ballots being mailed.
Voting packages provide instructions on how to cast ballots by telephone.
Votes will be tabulated by BallotPoint, which will report the results to the International. Results will be posted at www.smart-union.org/td/ when received by BallotPoint, which is expected the day voting is closed.
Results will be based on valid ballots cast.
To stay current on news relating to the tentative national rail contract, visit www.smart-union.org/td/ and click on the “National Rail Contract” link at the bottom right corner of the home page.
AFL founder Samuel Gompers said the objective of labor is, “more, now.”
Our national rail agreement fulfills that objective.
In an economic environment that has our brothers and sisters in other industries in a vice grip of difficult times, our agreement delivers more than just a 17 percent wage increase, a 6½-year cap on health care insurance premiums, certification pay, a faster process for new hires to reach full-pay rates and no work-rules give-backs.
The 17 percent wage increase is significantly higher than the rate of price inflation – giving you a greater boost in purchasing power than any other national contract in the past 40 years.
By contrast, President Obama imposed a two-year wage freeze on federal employees, and not a day passes without news of wage and health care givebacks in other industries.
Our $200 monthly cap on health care insurance contributions is less than half what federal workers currently are paying; and is more than $140 less than the average currently paid by private-sector workers.
Health care plan design changes deliver expanded and improved health care benefits, such as personalized medicine and access to centers of excellence – benefits we never before had. Personalized medicine assure you access to the most up-to-date health care products available; and centers of excellence means that if you or a family member suffers a serious illness, you gain access to the most advanced treatment center for that illness in America.
Sadly, other organizations – unable on their own to reach a national agreement — have attacked ours.
These other organizations ignore that neutral arbitrators have previously ruled that carrier profitability is not a valid reason for increasing wages. Moreover, the Surface Transportation Board has concluded that while rail profits are up sharply, the carriers remain revenue inadequate. Captive shippers, citing higher rail profits, have lost every argument before Congress to impose caps on freight rates.
These other organizations also ignore that presidential emergency boards merely make recommendations under the Railway Labor Act. Those recommendations are subject to amendment by Congress, and if we turn our fate over to Congress, it is the House Transportation & Infrastructure Committee that will be the committee of jurisdiction. The chairman of that committee is Rep. John Mica (R-Fla.).
In recent weeks, Chairman Mica has voiced opposition to union representation for Transportation Security Administration workers, advanced legislative language to privatize Amtrak and slash transit funding, and to overturn a National Mediation Board ruling assuring that a majority of those voting determine the outcome of airline and railroad representation elections. Rep. Mica wants the NMB to count as “no” votes anyone who does not cast a ballot.
In fact, if this agreement is rejected, and third parties determine our fate, the carriers will cite federal worker benchmarks – the wage freeze and far higher health care insurance premiums — to Congress. Everything we won in this agreement is off the table if we go to a presidential emergency board, with the carriers able to resort to their original Section 6 notice.
Brothers and sisters, this agreement deserves to be ratified on its merits. It delivers “more, now.”
Members of the UTU National Rail Contract Negotiating Committee, assisted by International officers and general chairpersons, are barnstorming the nation, holding face-to-face meetings with members to explain the tentative agreement and respond to questions.
The meetings began last week and continue through early August — prior to voting packages being mailed to some 38,000 members eligible to vote on the agreement.
A slideshow, shown at these meetings, provides an overview of the agreement; and a link to that slide show is found below.
A listing of meeting locations and dates can be found be clicking on another link, below.
A link also is provided to a webpage with additional information, including a link to the actual agreement.
Key points being explained to members include:
* The 17-percent wage increase is substantially higher than the rate of price inflation in 2010 and 2011, and the Department of Labor’s estimate of price inflation in subsequent years.
* The wage increase actually is 18.24 percent compounded, because each annual sequential wage increase is computed on the wage base increased by the previous year’s wage increase.
* This agreement exceeds the level of price inflation by more than any previous national rail agreement in the 41-year history of the UTU. Although the excess of the wage agreement over price inflation may appear greater in the 1970-1973 agreement (as shown graphically in a slide), that agreement didn’t account for cost-of-living adjustments; and there were givebacks, including changes in interdivision service, road-yard demarcation and run-throughs. There are no givebacks in the current tentative agreement.
* Price inflation, as computed by the Department of Labor, includes increases in costs of such items as food, autos, gasoline, clothing and other consumer goods and services. Wages that exceed price inflation provide members with greater everyday purchasing power.
* The $200 monthly cap on health care insurance assures that members will pay considerably less than is being paid by federal workers and workers in the private sector (as shown graphically in a slide). That slide also shows that were this agreement not ratified, and the existing formula for health care insurance premiums continued, members would pay considerably more than $200 monthly.
* Health care costs have been rising dramatically – more than doubling since 2000; and UTU member health care insurance premiums doubled from $100 monthly to $200 monthly in the previous agreement. This tentative agreement has provisions to help bring these costs under control, while improving the quality of health care (shown in several slides). Without bringing health care costs under control, members would face considerably higher premiums in future years.
* A significant provision in this tentative agreement maintains the $200 monthly cap for 6 ½ years, or 18 months beyond the reopening of the contract. There are certain to be increases in existing health care insurance premiums for federal workers and other private sector workers during this period – workers already paying considerably more than the $200 monthly cap provided in this tentative agreement.
* While it is alleged by some that the UTU National Rail Contract Negotiating Committee could have extracted more from the carriers owing to record-profits of major railroads party to the agreement, the fact is that carrier profitability has been ruled by neutral arbitrators not to be a valid reason for increasing wages.
* Said Arbitration Board No. 559 in 1996: “We do not think that ‘bigness’ alone or profits by themselves are permissive reasons for recommending wage increases … in our view, the union’s claim that current profit levels justify greater wage increases does not fly.”
* Were this agreement not to be ratified, third parties would decide. A presidential emergency board would consist of neutrals, all aware that President Obama froze wages of federal employees for two years, that federal employees’ health care premiums are more than double the $200 cap in this tentative agreement, that 46 million Americans have no health care insurance, and millions of unionized workers have suffered wage cuts, loss of health care benefits and loss of pensions.
* Presidential emergency board recommendations are subject to congressional amendment. The committee of jurisdiction will be the House Transportation & Infrastructure Committee, whose chairman, Rep. John Mica (R-Fla.), proposes eliminating Amtrak and slashing transit funding, and opposes union representation of Transportation Security Administration workers. Moreover, the anti-labor Republican leadership in the House proposes folding Railroad Retirement into Social Security and privatizing Social Security and Medicare.
* Historically, rail unions do poorly after rejecting tentative agreements. Many members recall the devastation in 1991 of PEB 219 recommendations, when two of the most labor-friendly lawmakers – Rep. John Dingell (D-Mich.) and Sen. Ted Kennedy (D-Mass.) — chaired the committees of jurisdiction.
* As National Legislative Director James Stem counsels: “This agreement provides significant financial improvement and economic stability for our families. Any other option would be a big gamble we cannot afford to take.”
To view the slide show, click on the following link:
UTU general chairpersons on Nov. 2 served on railroads represented by the National Carriers’ Conference Committee (NCCC) the UTU’s intended amendments to agreements affecting rates of pay, rules and working conditions.
Such notices are required by Section 6 of the Railway Labor Act and are served on each other by parties to existing agreements.
The national rail contract between the UTU and railroads represented by the NCCC became amendable on Jan. 1, 2010.
The existing contract will remain in force until tentantively negotiated amendments are presented to UTU members and ratified under the craft autonomy provisions of the UTU Constitution.
During this round of national contract negotiations with the UTU, the NCCC will be the chief bargaining representative for BNSF, CSX, Kansas City Southern, Norfolk Southern, Soo Line, Union Pacific and numerous smaller railroads.
Other railroads, including Amtrak and U.S. operations of Canadian National, negotiate individually with the UTU.
Some 40,000 UTU members are affected by these national contract talks with the NCCC, and the resulting agreements frequently set patterns for other negotiated rail agreements.
UTU International President Mike Futhey, who headed the UTU team that negotiated the most recent member-ratified amendments to the existing agreement, will lead the UTU negotiating team in this round of collective bargaining. Members of the negotiating team will be selected later in November.
Other rail labor unions will negotiate their own agreements with the NCCC.
Major elements of the UTU’s Section 6 notices include:
Complete and permanent elimination of existing service scale (entry rates of pay).
Complete and permanent elimination of the two-tier pay system.
A series of general wage increases, effective Jan. 1, 2010, and every six months thereafter.
Cost of living adjustments.
A crew calling window structure or no less than a 10-hour call.
A process to resolve fatigue issues relative to cross-craft utilization, inaccurate line-ups and manipulation of pool crew boards caused by paper deadheading and dropping of turns.
Compensation for certifying as a conductor (certification to be established by the FRA as directed by the Rail Safety Improvement Act of 2008).
Peer related craft pay for training periods.
Carriers to give first employment consideration to qualified conductors furloughed from other railroads.
Furloughed employees called back to work will be guaranteed a minimum of 60 days of work and pay.
Increased meal allowances.
Restrictions on transferring, consolidating, combining or centralizing yardmaster assignments.
Establishment of a formula for yardmaster extra boards.
Enhanced benefits under the NRC/UTU Health and Welfare Plan and the Railroad Employees’ National Health and Welfare Plan (GA-23000).
UTU Section 6 notices were developed beginning with recommendations offered by UTU members.
A committee of general chairpersons from the Association of General Chairpersons, District 1, reviewed and fine-tuned those suggestions, which were then approved by the entire Association of General Chairpersons, District 1.
The tentative national agreement with BNSF, CSX, Kansas City Southern, Norfolk Southern, and Union Pacific, which you will vote on soon, was hammered out in an intense two-day bargaining session Jan. 22-23 because the carriers recognized the unity the UTU brought to the negotiating table.
Equally important to the process was our return to interest-based bargaining, whereby both sides choose mutual problem solving to confrontation.
A year had gone by without a single meeting between the two sides, and the situation looked bleak. There were credible signals from the carriers that they intended to cash-in their Bush administration IOUs and move for a presidential emergency board (PEB) by spring. After all, the carriers had established a pattern, holding ratified agreements from most of the other labor organizations.
The carriers reasoned they could count on a carrier-friendly PEB to recommend that the pattern be forced on us. In an election year, with Congress not wanting a rail strike dumped in its lap, the odds were similarly high that lawmakers would quickly pass legislation ordering us back to work under the precise recommendations of the Bush-appointed PEB.
With that unhappy chain of events looming, I met with CSX CEO Michael Ward and made clear that the UTU’s intent was to craft a win-win agreement. We both agreed that a mutually negotiated settlement is preferable to one imposed by a third party – even if the carriers thought the White House is on their side. I asked Mr. Ward to relay our message to the other CEOs and the industry’s labor negotiators.
Our bargaining team reaffirmed our intent to reach a negotiated settlement when we sat down Jan. 22 with the carriers’ chief labor negotiators in Jacksonville, Fla. We were told that they and their CEOs had been reading our leadership messages on the UTU Web site, and sensed a more positive approach from the UTU — and they were prepared to respond in kind.
Before the sun set on the second day, we had that win-win agreement. The carriers acknowledged that prolonged warfare in Congress and before the federal courts was counterproductive.
The carriers agreed to go beyond the pattern. They offered the UTU — and only the UTU — a continuation of a cost-of-living adjustment (COLA) during the period new agreements are being negotiated. The UTU also was the only union to achieve, in national negotiations, an increase in the meal allowance.
Also, the carriers agreed to provide full health-care insurance to new hires and their families after only one month, rather than four; and agreed to arbitrate the dispute over entry rates tied to training; and, for the first time, to make contributions to the yardmasters’ supplemental retiree medical insurance program.
We busted the pattern. But if we fail to ratify this agreement, we could lose it all — and more, because a PEB and Congress could embrace the carriers’ desire for one-person crews and elimination of the Federal Employers’ Liability Act (FELA).
In the days ahead, we will be providing much more information on the tentative agreement, including answers to questions posed by general chairpersons. Please, stay informed. This agreement deserves ratification. The alternative is unthinkable.