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A mining and natural resources company, Oxbow Carbon and Minerals, has filed an antitrust suit against BNSF and Union Pacific, alleging the railroads have illegally fixed freight rates, in violation of the Sherman Antitrust Act, “to gouge customers.” Oxbow mines and ships coal and petroleum coke.

The lawsuit, before the federal District Court for the District of Columbia, was filed the same day the Association of American Railroads and the American Short Line and Regional Railroad Association urged members of Congress to oppose legislation introduced in the Senate earlier this year by Sen. Herb Kohl (D-Wis.) to bring railroads more fully under the nation’s antitrust laws. That bill is S. 49, the Railroad Antitrust Enforcement Act of 2011.

There is no direct connection between the Oxbow lawsuit and S. 49, although they both deal with antitrust law. The lawsuit alleges violations of the Sherman Antitrust Act of 1890.

Oxbow, controlled by industrialist William Koch, is asking the federal court to order BNSF and UP “to stop their illegal practices that restrain competition,” and is seeking unspecified damages that would be tripled under antitrust law if the lawsuit is successful.

The lawsuit also alleges BNSF and UP “have colluded” with CSX and Norfolk Southern, with the four railroads “[conspiring] since 2003 to use the deceptive concept of a ‘fuel surcharge’ to raise prices charged to their customers. The so-called ‘fuel surcharge’ has little to do with the actual cost of fuel and is simply a mechanism to increase rail shipping prices,” alleges Oxbow.

An attorney for one of the law firms representing Oxbow said, “This lawsuit will finally force Union Pacific and BNSF to account, in federal court, for their long history of breaking American antitrust laws. The complaint filed today describes how the railroads have used monopolization and price-fixing illegally to drive up the price of shipping coal and many other products, and those higher prices affect every business and consumer in the country.

“Only the power of the federal court can compel the freight railroad industry to fundamentally reform its business practices and stop abusing customers, consumers and the national economy,” said the attorney representing Oxbow.

Additionally, the Oxbow complaint alleges that since passage of the Staggers Rail Act of 1980, which partially deregulated railroads, mergers have resulted in only four major rail carriers – BNSF, CSX, NS and UP — and that the four “control shipping in the western states and agreed not to compete with each other or encroach on each other’s service territories by offering lower prices to potential customers.”

A BNSF spokesperson told Bloomberg news, “BNSF has not colluded or conspired in violation of any law.” UP said in a prepared statement that Oxbow had long warned of litigation unless the railroad came through with “exceptional commerical concessions.”

In its letter to congressional lawmakers June 7, the Association of American Railroads and the American Short Line and Regional Railroad Association said S. 49 “purports to repeal the railroads’ antitrust exemptions in order to treat the railroads like all other industries. However, the bill goes much further than repealing the limited antitrust exemptions the railroads currently have. It would subject railroads to discriminatory provisions that do not apply to other regulated industries.

“Railroads are already generally subject to the same antitrust laws as other businesses,” said the railroad associations in regard to S. 49. “The limited exemptions that the railroads do have exist only where the Surface Transportation Board regulates the same matter or activity. There is no gap in government regulatory oversight.

“Going beyond the antitrust laws, the bill limits the application to the railroads of the judicial doctrine which allows courts to defer to the primary jurisdiction of an administrative agency on matters that are within the agency’s areas of expertise and oversight,” the railroad associations told lawmakers.

“This doctrine is common for all regulated industries and for all legal matters,” said the railroad associations. “However, [S. 49] singles out only the railroads for hostile treatment in a manner which has nothing to do with an antitrust exemption.”

MINERAL SPRINGS, N.C. — CSX conductor Phillip E. Crawford Jr., 33, and locomotive engineer James Gregory Hadden, 36, were killed early May 24 in a rear-end collision here involving two CSX freight trains, according to news reports. Mineral Springs is some 30 miles south of Charlotte.

Crawford was a member of UTU Local 970, Abbeville, S.C. He signed on with CSX in October 2005.

Two crew members on the lead train, which was hit from the rear, suffered minor injuries, reported the Charlotte Observer.

The National Transportation Safety Board and the Federal Railroad Administration are investigating the North Carolina train collision, and a member of the UTU Transportation Safety Team is assisting the NTSB.

A CSX spokesperson told the Associated Press that the rear-end collision occurred on northbound tracks and involved one train enroute to Hamlet, N.C., from New Orleans, and another enroute to Charlotte from southern Georgia. Each train was pulled by two locomotives; one pulling nine freight cars, and the other 12, said CSX.

In Ft. Worth, a BNSF switch foreman and UTU Local 564 member, Paul Young, 28, with almost seven years’ service, lost both legs and an arm after being hit by a train in BNSF’s Alliance Terminal of May 23. Young, a resident of Haslet, Texas, reportedly was performing a gravity switch at an ethanol plant at the time of the accident.

NORTH PLATTE, Neb. — A Union Pacific machinist here was ordered rehired with back pay in a ruling by the Occupational Health and Safety Administration (OSHA) that found Union Pacific violated the worker’s rights under the Federal Rail Safety Act of 2007.

OSHA ruled that in firing the machinist, after he had reported a work-related injury, Union Pacific had improperly retaliated against him.

The railroad also was ordered to post a workplace notice admitting it was found to have retaliated against an employee for reporting a work-related injury.

In December 2010, OSHA ordered a UTU member employed by BNSF to be reinstated with back pay after finding BNSF guilty of improper retaliation after the worker filed an injury report with the Federal Railroad Administration.

The Federal Rail Safety Act of 2007 protects rail workers from retaliation and threats of retaliation when they report injuries, report that a carrier violated safety laws or regulations, or if the employee refuses to work under certain unsafe conditions or refuses to authorize the use of any safety related equipment.

Retaliation, including threats of retaliation, is defined as firing or laying off, blacklisting, demoting, denying overtime or promotion, disciplining, denying benefits, failing to rehire, intimidation, reassignment affecting promotion prospects, or reducing pay or hours.

An employer also is prohibited from disciplining an employee for requesting medical or first-aid treatment, or for following a physician’s orders, a physician’s treatment plan, or medical advice.

This protection is known as “whistle-blower protection,” and the federal law is enforced by OSHA, as it was against UP and BNSF.

Relief may include reinstatement with the same seniority and benefits, back pay with interest, compensatory damages (including witness and legal fees), and punitive damages as high as $250,000.

A rail employee may file the complaint directly with OSHA, or may contact a UTU designated legal counsel, general chairperson or state legislative director for assistance.

A listing of UTU designated legal counsel is available at www.utu.org, or may be obtained from local or general committee officers or state legislative directors.

To view a more detailed OSHA fact sheet, click on the following link:

http://www.osha.gov/Publications/OSHA-factsheet-whistleblower-railroad.pdf

A memorial fund has been established for the three killed in a collision between a shuttle-van and freight train in Kelso, Wash., March 23.
A second fund was established to assist a UTU-member and conductor critically injured in the accident.
Killed in the collision at a private highway-rail grade-crossing were BNSF conductor-trainee Christopher Loehr, 28; BNSF locomotive engineer Thomas Kenny, 58; and van driver Steven Sebastian, 60. Critically injured was BNSF conductor Dwight Hauck, 51, a member and trustee of UTU Local 324, Seattle.
Hauck, Loehr and Kenny, who had brought a BNSF freight train from Seattle to Kelso, were passengers in the BNSF-provided shuttle van driven by Sebastian when it was hit by a BNSF freight train at the crossing. A Federal Railroad Administration investigation is underway to determine the cause of the accident.
Donations to the memorial fund will be divided equally among the families of Loehr, Kenny and Sebastian. They should be sent to:

BNSF Memorial Fund 2011
Account 38430
Cascade Federal Credit Union
4035 23rd Ave.
Seattle, WA 98199

Donations to the fund to aid the injured Hauck and his family should be sent to:

Dwight Hauck Fund
Account 8277835552
Wells Fargo Bank
999 3rd Ave.
Seattle, WA 98104

WASHINGTON — President Obama Feb. 23 named BNSF CEO Matt Rose, AFL-CIO President Rich Trumka and United Food and Commercial Workers’ Secretary-Treasurer Joseph Hansen to the White House Council on Jobs and Competitiveness.

The three join a long list of mostly business executives and bankers on the council.

Its task is to recommend ways to promote growth and bolster U.S. competitiveness in fulfilling Obama’s State of the Union pledge to “out-innovate, out-educate, and out-build” other nations.

UTU Local 367 represented employees of Nebraska Central Railroad, which includes all crafts, have ratified a wage, rules and working conditions agreement with an 80 percent plurality.

The five-year agreement provides for a signing bonus, wage increases, a minimum-hours guarantee and improved working conditions.

Assisting Local 367 in the negotiations were UTU International Vice President John Previsich, Union Pacific General Chairperson Rich Draskovich and Union Pacific Vice General Chairperson Brent Leonard (both, GO 953).

The three praised the efforts of Local 367 Chairperson Brandon Glendy in determining member concerns prior to negotiations, and then assisting with negotiations and explaining to members the tentative agreement prior to its overwhelming ratification.

Nebraska Central Railroad operates entirely in Nebraska over 340 miles of former BNSF and Union Pacific track.

The local lost one of its members in June 2010 when 38-year-old conductor Jeffrey Scholl died in the collapse of a railroad bridge into the flood-swollen Elkhorn River. Two other members of Local 367 were injured in the bridge collapse.

How did major railroads perform in 2010?

Reviewing their calendar-year and fourth-quarter profit statements, one wouldn’t know they were operating in the midst of a nationwide recession.

Profits soared, stock dividends were raised and operating ratios improved. (Operating ratio — a railroad’s operating expenses expressed as a percentage of operating revenue — is considered by economists to be the basic measure of carrier profitability.)

Wall Street analyst Ed Wolfe reports the level of freight car and intermodal loadings for the year registered “the best” year-over-year growth in more than 50 years.

Wolfe and other analysts also point to the railroads’ pricing strength — the ability to raise rates on shippers with limited effective alternatives to railroad transportation. Many long-term contracts for hauling coal are expiring, and substantial rate increases on that traffic already are reflected in new contracts.

Indeed, railroad CEOs are predicting another strongly profitable year in 2011, which was reflected in year-end railroad stock prices, which were flirting with record highs.

Following are profit reports from the major railroads:

 Canadian National:

  • Fourth-quarter profit increased 19 percent.
  • Calendar-year 2010 profit increased 13.5 percent.
  • Operating ratio improved four percentage points to 63.6.
  • The stock dividend was raised 20 percent.
  • The year-end stock price was up 38 percent. Analysts predict CN’s stock price will rise another 4 percent in 2011.

 Canadian Pacific:

  • Fourth-quarter profit increased 34 percent.
  • Calendar-year 2010 profit increased 39 percent.
  • Operating ratio improved four percentage points to 77.6.
  • The stock dividend was raised 9 percent.
  • The year-end stock price was up 45 percent. Analysts predict CP’s stock price will rise another 8 percent in 2011.

 CSX:

  • Fourth-quarter profit increased 46 percent.
  • Calendar-year 2010 profit increased 35 percent.
  • Operating ratio improved four percentage points to 71.1.
  • The stock dividend was raised 26 percent.
  • The year-end stock price was up 62 percent. Analysts predict CSX’s stock price will rise another 6 percent in 2011.

 Kansas City Southern:

  • Fourth-quarter profit increased 47 percent.
  • Calendar-year 2010 profit increased 82 percent.
  • Operating ratio improved 8.8 percentage points to 73.2.
  • The year-end stock price was up 74 percent. Analysts predict KCS’s stock price will rise another 7 percent in 2011.

 Norfolk Southern:

  • Fourth-quarter profit increased 31 percent.
  • Calendar-year 2010 profit increased 45 percent.
  • Operating ratio improved 5 percentage points to 71.9.
  • The stock dividend was raised 11 percent.
  • The year-end stock price was up 41 percent. Analysts predict NS’s stock price will rise another 8 percent in 2011.

 Union Pacific:

  • Fourth-quarter profit increased 31 percent.
  • Calendar-year 2010 profit increased 47 percent. UP Chairman Jim Young said 2010 was the “most profitable year in Union Pacific’s nearly 150-year history.”
  • Operating ratio improved 5.5 percentage points to 70.6.
  • The stock dividend was raised 40 percent.
  • The year-end stock price was up 60 percent. Analysts predict UP’s stock price will rise another 8 percent in 2011.

 BNSF:

As BNSF is now privately held, it no longer reports detailed financial data.

A UTU member will be collecting more than $95,000 in penalties assessed against BNSF by the Occupational Safety & Health Administration (OSHA) for the railroad’s violation of the Federal Rail Safety Act.

OSHA found BNSF guilty of intimidating and harassing an injured UTU member who reported his workplace injury to the Federal Railroad Administration. The monetary award covers back wages, compensatory damages, attorney’s fees and punitive damages.

This is the first major award by OSHA after UTU International President Mike Futhey requested UTU designated legal counsel ramp up efforts to assist members whose whistle-blower rights under the Federal Rail Safety Act have been violated.

BNSF employee Ronald Helm (Local 1532, Kansas City), targeted for discipline after being injured on the job, didn’t feel so helpless against his powerful employer after his local chairperson, Joe Lopez, attended a seminar on whistle-blower rights given by a designated legal counsel. Helm is a 33-year veteran of the former Santa Fe and BNSF.

With assistance from General Chairperson Jim Huston (BNSF, GO 009), and committee Secretary Rex Pence, a case was developed and presented to OSHA, which administers the law as it applies to whistleblower protection.

Helm had been assessed a 30-day record suspension with no time lost, given one-year probation, and assessed 40 points against his personal performance index after reporting his personal injury to the FRA. Had the injury not been FRA reportable, he would have been assessed only five points.

BNSF said the penalty against Helm was for using a pin lifter, instead of a hickory stick, to adjust mismatched couplers in BNSF’s Argentine, Kan., yard. Evidence showed BNSF had not made the hickory stick available until after Helm’s injury.

Moreover, according to OSHA, BNSF’s discipline was arbitrary because BNSF typically does not discipline workers for using different tools if work is performed in a timely manner.

“An employer does not have the right to retaliate against employees who report work-related injuries,” said OSHA. And BNSF’s points system serves to discourage the proper reporting of workplace injuries, said OSHA.

In addition to the monetary penalty, BNSF was ordered to inform each of its employees in its Kansas Division — and in writing — of their whistle-blower rights under the Federal Rail Safety Act of 2007.

“This case and the work of our designated legal counsel shows that the federal law protecting whistle-blowers has teeth and that it can and will be used to stop the intimidation and harassment faced by our members,” Futhey said.

“UTU members who think they have been retaliated against for reporting workplace injuries should discuss the matter with a UTU designated legal counsel, their general chairperson or state legislative director,” said Futhey.

Complaints must be filed with OSHA within 180 days of the alleged employer retaliation.

Click on the following link for a listing of UTU designated legal counsel:

https://www.smart-union.org/td/designated-legal-counsel//

Click on the following link for a detailed OSHA fact sheet:

www.osha.gov/Publications/OSHA-factsheet-whistleblower-railroad.pdf

First it was Union Pacific wanting to have its trains inspected in Mexico.

Now BNSF is making the same plea to the FRA — and as the UTU and other rail unions did in the case of UP — the FRA is being advised to, “just say no.”

Putting safety first cannot co-exist with farming out crucial safety inspections to the lowest bidder, the UTU and the other labor organizations told the FRA in the case of both UP (in October) and BNSF (in December).

To begin with, the Rail Safety Improvement Act of 2008 established standards to be met when railroads seek safety waivers, such as wanting trains inspected south of the border.

The UTU, the Brotherhood of Locomotive Engineers & Trainmen, the Brotherhood of Railroad Signalmen, the Brotherhood of Maintenance of Way Employes and the American Train Dispatchers Association contend that neither UP nor BNSF have demonstrated that the inspections in Mexico will meet minimum FRA standards.

In fact, neither UP nor BNSF has shown that the FRA will have the uninhibited authority to examine the Mexican facilities where the safety inspections would be made.

Furthermore, said the UTU and other labor organizations, moving the inspections south of the border would be in direct conflict with congressional policy — and eminent common sense — to preserve employment in the U.S. during this lengthy and stalled recession.

The labor organizations told the FRA that “it is common” for cars from Mexico to enter the U.S. “with handbrakes applied, retaining valves set, angle cocks closed and bad order cars located within the train.

“Not to be overlooked is the fact that these trains also frequently are transporting hazardous materials cars,” the UTU and other labor organizations told the FRA.

“Historically, the FRA has denied requests for waivers of air brake and mechanical safety inspections on trains entering the U.S. if the request involves movement of the trains past a point where the inspections can be performed,” said the labor organizations.

By Assistant President Arty Martin and
GS&T Kim Thompson

Among the most difficult challenges facing us in 2009 arrives in November, when we exchange Railway Labor Act Section 6 notices with the carriers — the list of each side’s demands for the next collective bargaining round.

Our national rail contract is open for renewal on Jan. 1, 2010, and this upcoming bargaining round will be among our toughest ever given the deteriorating state of the national economy, the advance of technology and Wall Street pressure on railroads to deliver increased profits.

While the national rail contract affects members on only BNSF, CSX, Kansas City Southern, Norfolk Southern and Union Pacific, these national contracts tend to be a trend setter for bargaining on other freight railroads and Amtrak, and are frequently referred to by commuter railroads.

A reasonable individual might have good reason to assume the upcoming bargaining round will be favorable to employees. After all, railroads are among today’s few solidly profitable industries in America, and Wall Street confirms they have unprecedented pricing power. Moreover, the carriers continue to improve productivity, and it is the workers — especially operating craft employees — who are most responsible.

Indeed, the railroads’ own figures, as published by the Association of American Railroads, show that revenue ton-miles per employee — the best benchmark for measuring productivity — has soared five-fold since 1980, from 2.1 million revenue ton-miles per employee to almost 11 million revenue ton-miles per employee today.

Accordingly, the railroads’ labor costs have declined by 43 percent — from 46.5 cents of every revenue dollar in 1980, to 26.4 cents of every revenue dollar today.

This is because the employee headcount has dropped from 532,000 in 1980 to 236,000 today — a 56 percent decline in workers, while productivity has soared. Among train and engine service employees, the head count fell from almost 136,000 in 1980 to fewer than 70,000 train and engine service employees today.

Unfortunately, none of this matters to the carriers at the bargaining table, because it is hot Wall Street dollars that set the tone of carrier Section 6 notices.

Perhaps you have noticed Wall Street investment funds have been buying up shares of the major railroads.

BNSF, for example, is 46 percent owned by Wall Street investment funds. At CSX, the figure is 35 percent; at Union Pacific, 34 percent; at Kansas City Southern, 33 percent; and at Norfolk Southern, 32 percent, according to Bloomberg News.

These investment funds, some of them based in foreign countries, have a narrow focus of increasing stock price and increasing dividend payouts — often without concern to an appropriate level of railroad maintenance, and certainly without concern for employees and their families.

For sure, investment funds are behind the anti-labor policies at Wal-Mart and policies that export good American jobs overseas.

What a labor union does is to fight back — and the UTU will be spending the months leading up to the exchange of Section 6 notices by building our case on behalf of our members.

Who Owns the Railroads

BNSF 
Berkshire Hathaway21.8%

Capital Research Global

5.6%

Barclays Global

3.3%

UBS Global

3.0%

Vanguard Group

2.8%

State Street Corp.

2.7%

Fidelity Mgt.

2.4%

Capital World Invest.

1.7%

JP Morgan Chase

1.2%

Barrow, Hanley

1.2%

Total

45.7%

  

 CSX

 

Citigroup

5.4%

Barclays Global

4.7%

Children’s Invest. Fund

4.5%

3G Capital

4.4%

Deutsche Bank

4.2%

State Street Corp.

3.6%

Vanguard Group

3.2%

Tiger Global

1.9%

Bank of N.Y.

1.6%

JP Morgan Chase1.3%

Total

34.8%

  

 KCS

 

Neuberger Berman

6.2%

Wellington Mgt.

5.7%

Marathon Asset Mgt.

4.1%

Barclays Global

3.6%

Vanguard Group

3.0%

Keeley Asset Mgt.

2.8%

Bank of America

2.4%

Prudential

1.9%

Munder Capital Mgt.

1.9%

AXA

1.8%

Total33.4%
  
Norfolk Southern 

Capital Research Global

5.0%

Marsico Capital Mgt.

4.8%

JP Morgan Chase

4.7%

Barclays Global

4.5%

State Street Corp.

3.2%

Vanguard Group

3.1%

 Fidelity Mgt.

 2.7%

Pioneer Investment

1.3%

Dimensional Fund

1.3%

Capital World Invest.

1.1%

Total

31.7%

  

Union Pacific

 

Marsico Capital Mgt.

6.6%

Children’s Invest. Fund

4.7%

Barclays Global

4.4%

Capital World Invest.

3.4%

State Street Corp.

3.2%

Vanguard Group

3.0%

AXA

2.9%

Fidelity Mgt.

2.5%

Bank of America

1.9%

Berkshire Hathaway

1.8%

Total

34.4%

Source: Bloomberg News