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Elliott

NEW YORK – Former UTU Associate General Counsel Dan Elliott, now chairman of the U.S. Surface Transportation Board — the federal agency regulating rail mergers, line sales, abandonments and labor protection — returned to his roots July 4, speaking to more than 500 UTU officers and members attending the union’s eastern regional meeting here.

Terming train and engine workers “the unsung heroes” of the freight railroad industry’s renaissance, Elliott said, “None [of the resurgence] would have been possible without the people in this room. Labor was a major contributor to the rebirth of the rail industry as productivity shot through the roof [since Congress partially deregulated railroads through the Staggers Rail Act of 1980]. This is all thanks to your working harder, smarter and better,” he said.

Elliott recalled that prior to partial deregulation afforded by the Staggers Act, railroad bankruptcies were increasing, track often was in such poor repair that there were standing derailments, service quality had deteriorated and job security was problematic.

The Staggers Act, said Elliott, set loose market forces, giving railroads “greater flexibility to make decisions, develop better ideas and operate more efficiently. There are fewer trucks on the highway and the United States has some of the lowest freight rates in the world. It has all been done with private investment.” He said his job and the job of the STB is to “make sure the industry stays healthy.”

As for his elevation to the STB – which required a nomination by President Obama and confirmation by the Senate — Elliott said, joking, it was something he had long sought. Reflecting on an early-career appearance before the STB’s predecessor agency, the Interstate Commerce Commission, Elliott recalled having to make a difficult argument seeking labor protection.

“I was told to say my piece and sit down. So I went to Washington to the ICC Building. There were scores of railroad attorneys, a press table and spectators. I said my piece. And the chairman asked me to explain why UTU members should have lifetime income protection when nobody else in the room had it. I knew right then and there that I wanted to be the one asking the questions and not answering them,” Elliott said.

WASHINGTON — A former John McCain aide, Ann Begeman, has been confirmed by the Senate as the one Republican on the three-member U.S. Surface Transportation Board.

Two other presidential nominees — Walt Barrows to become the labor member on the Railroad Retirement Board, succeeding Butch Speakman; and Republican Thomas Beck to the National Mediation Board, succeeding Elizabeth Doutherty — are awaiting hearings before the Senate Labor Committee. If the committee recommends confirmation, the nominations will move to the Senate floor for a vote.

Begeman succeeds Republican Chip Notthingham, who departed the STB following expiration of his term. Begeman’s term expires in December 2015. She joins Democratic Chairman Dan Elliott and Democrat Frank Mulvey.

Most recently, Begeman was Republican staff director for the Senate Commerce Committee, which recommended her nomination. From 2004-2009, Begeman was McCain’s legislative director and served as a McCain spokesperson during McCain’s unsuccessful run for the White House against President Obama. Earlier, she was a legislative aide to Sen. Larry Pressler (R-S.D.), who made an unsuccessful run in 1980 for the White House.

Begeman earned a degree in business from the University of South Dakota.

The three-person STB has regulatory authority over railroad mergers and labor protection for rail employees adversely affected by mergers, line sales and leases, and line abandonments. The STB also regulates railroad freight rates and freight-railroad dispatching of intercity Amtrak passenger trains.

WASHINGTON — President Obama has renominated two Republicans to key transportation posts after the Senate failed to take action on the nominations last year.

Nominated to the three-person National Mediation Board, for a term expiring July 1, 2013, is Republican Thomas M. Beck.

Nominated to the three-person Surface Transportation Board, for a term expiring Dec. 31, 2015, is Republican Ann D. Begeman.

Both must be confirmed by the Senate before taking office.

Both agencies have Democratic majorities and will continue under Democratic control so long as a Democrat is in the White House.

Beck was nominated to succeed Republican Elizabeth Dougherty on the NMB. Dougherty’s term expired July 1, but under NMB rules she may continue serving indefinitely until a successor is confirmed.

Since Oct. 2, Beck has been serving as a Senate-confirmed member of the Federal Labor Relations Authority (FLRA). The FLRA administers labor-management relations for non-Postal Service federal employees.

Previously, Beck was a partner in the law firm of Jones Day, practicing labor and employment law. He is a 1992 graduate of the University of Virginia Law School. Beck also is a part-time professor at George Mason University in Fairfax, Va., where he teaches courses on legislation and public policy.

The other two members of the NMB are Democrats — Chairman Harry Hoglander, who is serving his third term, and Linda Puchala, who was confirmed to her first term in May 2009.

Begeman was nominated to succeed Republican Chip Nottingham on the STB. Nottingham’s term expired Dec. 31, but under STB rules he may continue serving until a successor is confirmed, but no later than Dec. 31, 2011.

She currently is Republican staff director for the Senate Commerce Committee, but has been a long-time aide to Sen. John McCain (R-Ariz.), and served as a spokesperson for his unsuccessful run for president. Earlier, she was a legislative aide to Sen. Larry Pressler (R-S.D.).

Begeman earned a degree in business from the University of South Dakota.

The other two members of the STB are Democrats — Chairman Dan Elliott, who is serving his first term; and Frank Mulvey, who is serving his second term.

The STB has regulatory authority over railroad mergers and labor protection for rail employees adversely affected by mergers, line sales and leases, and line abandonments. The agency also regulates railroad freight rates.

WASHINGTON — Two Obama administration nominations of Republicans to key transportation regulatory positions — one to the National Mediation Board; the other to the Surface Transportation Board — were returned to the White House by the Senate this week without confirmation action and will have to be resubmitted to the Senate in the new Congress.

Republican Thomas M. Beck had been nominated by the president to the three-member NMB, for a term expiring Dec. 31, 2013; and Republican Ann D. Begeman had been nominated to the three-member Surface Transportation Board for a term expiring Dec. 31, 2015. Both agencies have Democratic majorities.

Under rules of the Senate, nominations not confirmed during the session during which they are made must be returned to the White House. The president may nominate them again in 2011, or choose new nominees. There is no indication Beck or Begeman will not be renominated or that the Senate would not confirm they if renominated.

Owing to a busy Senate calendar and the late timing of both nominations, neither was afforded a hearing before a Senate committee — Beck before the Health, Education & Labor Committee; Begeman before the Commerce Committee — an interim step prior to a Senate floor vote on confirmation.

Beck was nominated to succeed Republican Elizabeth Dougherty on the NMB. Dougherty’s term expired June 30, but under NMB rules she may continue serving indefinitely until a successor is confirmed. Since Oct. 2, Beck has been serving as a Senate-confirmed member of the Federal Labor Relations Authority (FLRA). The FLRA administers labor-management relations for non-Postal Service federal employees.

Previously, Beck was a partner in the law firm of Jones Day, practicing labor and employment law. He is a 1992 graduate of the University of Virginia Law School. Beck also is a part-time professor at George Mason University in Fairfax, Va., where he teaches courses on legislation and public policy.

The other two members of the NMB are Democrats — Chairman Harry Hoglander, who is serving his third term, and Linda Puchala, who was confirmed to her first term in May 2009

Begeman was nominated to succeed Republican Chip Nottingham on the STB. Nottingham’s term expires Dec. 31, but under STB rules he may continue serving until a successor is confirmed, but no later than Dec. 31, 2011. Begeman is a long-time aide to Sen. John McCain (R-Ariz.), and most recently has been an aide to the Senate Commerce Committee.

The other two members of the STB are Democrats — Chairman Dan Elliott, who is serving his first term; and Frank Mulvey, who is serving his second term.

The STB has regulatory authority over railroad mergers and labor protection for rail employees adversely affected by mergers, line sales and leases, and line abandonments. The agency also regulates railroad freight rates.

Almost 10,000 train and engine workers returned to work on Class I railroads through the first 11 months of 2010, with T&E jobs up almost 10 percent compared with November 2009, says the Surface Transportation Board, which tracks the data.

The STB says 61,819 train & engine workers are now on the job with Class I railroads.

The increase in train and engine workers during 2010 was more than double the increase in other crafts, said the STB.

WASHINGTON – The U.S. Surface Transportation Board says it will hold a hearing Dec. 9 to review certain exemptions from economic regulation afforded railroads – specifically, commodity exemptions, boxcar exemptions and intermodal trailer and container exemptions.

The exemptions from STB rate and service oversight were first imposed in 1976, and modified in 1980 following substantial deregulation of the rail industry by the Staggers Rail Act.

Creating those exemptions, said the STB, “fundamentally changed the economic regulation of the railroad industry. Prior to 1976, [the STB’s predecessor, the Interstate Commerce Commission] heavily regulated the industry. The ICC focused its regulation on ensuring equal treatment of shippers, which in some instances, led to railroad pricing decisions based on factors other than market considerations.

“These agency exemption decisions were instrumental in the U.S. rail system’s transition from a heavily regulated, financially weak component of the economy into a mature, relatively healthy industry that operates with only minimal oversight,” said the STB in announcing the hearing.

“The transition, however, was not without challenges, sometimes because an exemption … excuses carriers from virtually all aspects of regulation, even though the STB’s continuing jurisdiction over exempted movements also extinguishes any common law cause of action regarding common carrier duties,” said the STB.

“In recent years, the STB has received informal inquiries questioning the relevance and/or necessity of some of the existing commodity exemptions, given the changes in the competitive landscape and the railroad industry that have occurred over the past few decades,” said the STB.

“The STB will, therefore, hold a hearing to explore the continuing utility of and the issues surrounding the categorical exemptions.”

The Journal of Commerce reported Oct. 21 that the decision to hold the hearing followed a September promise to the Senate Commerce Committee by STB Chairman Dan Elliott that the STB would begin an examination of past regulatory practices.

Train and engine employment continues to climb back toward pre-recession levels, with Class I railroads continuing to call back furloughed train crews.

The Surface Transportation Board posted data for September, showing train and engine employment on Class I railroads grew almost 9 percent in September, versus September 2009; and was almost 2 percent higher than in August 2010.

Train and engine service employment stood at 61,444 in September, while total Class I railroad employment was at 154,094.

WASHINGTON – U.S. Surface Transportation Board member Charles “Chip” Nottingham said he will not seek reappointment when his term expires Dec. 31.

Under federal law, STB members may continue serving for up to 12 months after expiration of their term, or until a successor is nominated by the White House and confirmed by the Senate.

President Obama has not announced a nominee to succeed Nottingham, the lone Republican on the three-person STB.

The agency’s rail regulatory functions include approving mergers, line sales, line leases, line abandonments and imposition of labor protective conditions.

The other two members of the STB are Chairman Dan Elliott and Vice Chairman Frank Mulvey, both Democrats. Elliott was appointed chairman to succeed Nottingham in that post following Obama’s becoming president.

A Norfolk Southern sought lease of trackage to a newly created short line railroad in Michigan is being opposed by the UTU and the Brotherhood of Locomotive Engineers and Trainmen, which represent affected train and engine workers.

The U.S. Surface Transportation Board (STB) is being asked by the UTU and the BLET to revoke an exemption from regulatory review previously provided a proposed transaction of NS and Adrian & Blissfield Rail Road, a holding company intending to create a new shortline to lease and operate almost 45 miles of NS track near Lansing.

The new short line, to be called Jackson & Lansing, is expected — as is the case with virtually all upstart shortlines — to hire a new workforce that will be paid lower wages and benefits than NS now pays the five trainmen, three engineers and three other employees now assigned to that trackage by NS.

The UTU and the BLET are asking the STB to revoke a previously granted STB exemption that would permit the transaction to move to completion without regulatory scrutiny. Such exemptions are permitted if the STB is satisfied that neither competition, continued rail service, safety nor other so-called public interest considerations will be jeopardized as a result of the transaction.

In fact, STB Vice Chairman Frank Mulvey filed a dissent in the previous 2-1 decision granting the exemption, saying that the outward written commitments imposed by the parties require more information, “particularly when they contain outright bans on interchange with third party carriers or, as here, economic incentives that can only be evaluated with the provision of additional information.”

Specially, the UTU and the BLET ask the STB to reconsider its granting of the exemption for the following reasons:

  • Competition and reasonable rates: The transaction, as proposed, would exclude third party carriers (other than NS) from operating over the line, and limit interchange to and from other carriers. Also, the transaction, as proposed, appears to limit competition in order that Jackson & Lansing be able to increase freight rates to fund upgrades to the leased track and facilities. This would be in violation of congressionally imposed national rail transportation policy that supports rail-to-rail competition and fair and reasonable freight rates.
  • Safety: The so-far known facts of the transaction suggest it is highly unlikely either the holding company or its shortline, Jackson & Lansing, currently have sufficient funds and cash flow to upgrade the leased track and facilities to provide safe and reasonably timely operations. As expected carloadings will contain industrial waste, track and rail operating safety must be of significant concern.
  • Fair wages and working conditions: In the current economy — especially in Michigan, where unemployment is twice the national average — the affected employees and their families, and the State of Michigan, will suffer significant economic harm. By granting an exemption from regulatory scrutiny, the STB is permitting the transaction to move forward without imposing labor protection.

This also would violate national rail transportation policy, as it requires “fair wages and suitable working conditions.” The STB is obligated to consider (which can only be done by revoking the exemption and investigating the transaction) whether the new entity will impose substandard wages and working conditions, thereby significantly circumventing the terms and conditions of current collective bargaining agreements under which the affected employees are now covered.

Click here to read the joint UTU/BLET filing.