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A Wisconsin Central conductor has won a whistle-blower complaint against the carrier – collecting more than $125,000 in compensatory and punitive damages – for unlawful harassment and intimidation as the result of reporting an injury.

This was the third successful whistle-blower complaint filed against a railroad in recent months for violation of a worker’s rights under the Federal Rail Safety Act of 2007.

In the most recent case, the Occupational Safety and Health Administration ordered Wisconsin Central to cease and desist in its practice of automatically issuing notices of investigation for employees who report work injuries.

OSHA also ordered the carrier to pay the conductor lost wages, plus interest; $100,000 in punitive damages for its reckless disregard for the law; and $25,000 in compensatory damages for mental pain and emotional distress due to the humiliation and loss of income from the wrongful suspension. OSHA also ordered Wisconsin Central to provide all employees with a fact sheet advising them of their rights for reporting work-related injuries and illnesses.

According to the conductor’s attorney, the conductor reported an on-the-job injury, as required by railroad rules. The railroad subsequently issued a notice ordering the conductor to attend a formal investigation to ascertain his responsibility for sustaining a personal injury and to determine if the conductor violated any railroad rules.

Although it was determined that the railroad had abandoned previous efforts to treat an ice covered service road that the conductor was required to use in the performance of duties – resulting in the injury – Wisconsin Central found the conductor guilty of violating several rules and issued a 10-day suspension. The railroad alleged that by sustaining an injury, the conductor had violated the railroad’s rules.

Earlier this year, OSHA required Union Pacific to rehire a machinist it had fired following the reporting of a work-related injury, finding UP had improperly retaliated against him.

And in December 2010, OSHA ordered a conductor employed by BNSF to be reinstated after finding BNSF guilty of improper retaliation after the conductor filed an injury report.

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 Wisconsin Central, 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 http://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 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.”

SAN ANTONIO — For the scores of Teamster Union members in their fourth week on the picket line here in a strike against Pioneer Flour Mill, times are tougher than usual.
UTU Local 756 (UP, San Antonio) Chairperson John Dunn understands the hardship, and as so often occurs among UTU members, Dunn became a point-of-light, personally stepping up to the plate on behalf of his striking Teamster brothers and sisters with a random act of kindness.
Filling his pickup truck bed with 10 cases of Gatorade he purchased at a local store, Dunn headed out to the picket line one afternoon in May to distribute the beverages to the striking Pioneer workers.
The flour mill has been using managers and temporary workers to operate during the strike, and Union Pacific is utilizing managers to switch cars of corn, wheat and starch across picket lines into the mill, according to the San Antonio Express newspaper.

GILA BEND, Ariz. — A westbound Union Pacific freight train hit a U.S. Border Patrol SUV here May 12 as two Border Patrol agents, reportedly chasing suspected undocumented immigrants, suddenly entered an unmarked private crossing in their unmarked SUV as the train approached.

Both Border Patrol agents were killed in the collision, which occurred about 80 miles from the Mexican border.

News reports say the train’s crew members saw the SUV driving parallel to the tracks “when the unmarked SUV suddenly turned south into the crossing.” The engineer reportedly blew his horn prior to the crash, trying to get the SUV driver’s attention.

The Maricopa County Sheriff’s Department said the three-locomotive, 75-car UP train, enroute to Yuma, was traveling about 62 mph when it struck the SUV, pushing it about one-mile down the tracks.

News reports say sheriff’s deputies later arrested a group of eight suspected undocumented immigrants traveling on foot near the scene of the accident. They reportedly were carrying 315 pounds of marijuana.

Most major North American freight railroads reported strong earnings for the first quarter 2011 versus first quarter 2010.

Following is a wrap-up for the quarterly earnings reported by the railroads to the investment community.

Not included is BNSF, which is privately held and does not report its financial results to the investment community.

Mention is made of each railroad’s operating ratio. Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the higher is profit.

Canadian National

Canadian National reported a 31 percent increase in first quarter 2011 profit versus first quarter 2010. This comes following a 19 percent increase in CN profit for calendar year 2010.

CN’s operating ratio for the first quarter 2011 was 69 percent, slightly better than the 69.3 percent reported for first quarter 2010. The railroad’s fourth-quarter 2010 operating ratio was 63.6.

CN is primarily a Canadian railroad. Its U.S. holdings include what were formerly Detroit, Toledo & Ironton; Elgin, Joliet & Eastern; Grand Trunk Western; Illinois Central; and Wisconsin Central.

Canadian Pacific

Canadian Pacific Railway was the only major North American rail system reporting a drop in profit for the first quarter 2011 compared with first quarter 2010. CP cited severe winter weather as the cause of its profit decline.

CP’s calendar-year 2010 profit increased by 39 percent.

The railroad’s first quarter 2011 operating ratio soared to 90.6 compared with 82.3 in the first quarter 2010. CP’s fourth quarter 2010 operating ratio was 77.6.

CP said its 15,143 employee count increased by 613 during the quarter, but gave no indication of whether it would add employees the remainder of 2011.

First quarter 2011 train speeds fell by almost 14 percent and the number of train accidents soared by 57 percent — both attributed to a dramatic increase in the number of avalanches in the Canadian Rockies and winter-long blowing snow throughout CP’s North American rail network.

Canadian Pacific is primarily a Canadian railroad. Its U.S. holdings include Class I Soo Line and regional railroad Delaware & Hudson.

CSX

CSX profit jumped 30 percent during the first quarter 2011 versus the first quarter 2010, the railroad reported April 19. This comes on the heels of a 35 percent improvement in operating profit for calendar year 2010.

The CSX employee headcount rose in March to 30,464 employees, up 3 percent from March 2010, the railroad said.

The CSX operating ratio for the first quarter 2011 was a record low 72.5 for any first quarter. The fourth quarter 2010 CSX operating ratio was 71.1.

CSX operates some 21,000 route miles in 23 states and the District of Columbia.

Kansas City Southern

Kansas City Southern’s first-quarter 2011 profit was almost double that of the first quarter 2010. This followed an 82 percent increase in profit for calendar-year 2010.

The employee headcount remained constant at 6,080. The railroad did not indicate whether it would be increasing its headcount in 2011.

The KCS first quarter operating ratio declined significantly, from 75.2 percent the first quarter 2010 to 73.8 for the first quarter 2011. The railroad’s fourth-quarter 2010 operating ratio was 73.2.

KCS operates some 3,500 route miles in 10 states in the Central and South-Central U.S., as well as Kansas City Southern de Mexico, a primary Mexican rail line.

Norfolk Southern

Norfolk Southern reported a 26 percent increase in profit for first quarter 2011 versus first quarter 2010. This follows a 45 jump in NS profit for calendar-year 2010.

NS said it would add some 1,100 new workers during 2011, returning employment to the same level as in 2008.

NS operating ratio for first quarter 2011 was 77.1 percent, higher than the 75.2 percent in the first quarter 2010, owing, in part, to severe winter weather. The fourth-quarter 2010 NS operating ratio was 71.9 percent.

NS operates some 20,000 route miles in 22 states and the District of Columbia.

Union Pacific

Union Pacific profit rose 24 percent in first quarter 2011 compared with first quarter 2010, This follows a 47 percent jump in Union Pacific profit for calendar-year 2010.

UP said the railroad would increase its 43,000 employee headcount by about 4,500 in 2011.

The railroad reported a best-ever first quarter operating ratio of 74.7 percent — one of the more difficult for railroads because of winter weather. The fourth quarter 2010 UP operating ratio was 73.2.

Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.

Union Pacific profit rose 24 percent in first quarter 2011 compared with first quarter 2010, the railroad reported April 20. This follows a 47 percent jump in Union Pacific profit for calendar-year 2010.

UP Chairman Jim Young said the railroad would increase its 43,000 employee headcount by about 4,500 in 2011.

The railroad reported a best-ever first quarter operating ratio of 74.7 percent — one of the more difficult for railroads because of winter weather. The fourth quarter 2010 UP operating ratio was 73.2.

Operating ratio is a railroad’s operating expenses expressed as a percentage of operating revenue, and is considered by economists to be the basic measure of carrier profitability. The lower the operating ratio, the higher is profit.

Looking forward, UP Chairman Jim Young predicted significant volume growth in the second half of 2011. UP is “pretty confident right now we’re going to see a peak” that exceeds traffic volumes the second half of 2010, Young said. “We’ve started off strong in 2011 by achieving record results in the first quarter.”

Union Pacific operates some 32,000 route miles in 23 states in the western two-thirds of the U.S.

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

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.

On the same day (Jan. 20) Union Pacific reported record fourth quarter and record calendar year 2010 profits, UP Chairman Jim Young said he is headed to Washington to meet with President Obama’s economic advisers to oppose a congressional mandate that railroads implement crash-avoidance positive train control by year-end 2015.

UP told investors its 2010 fourth quarter earnings had soared by 31 percent from the same quarter in 2009, and that its calendar year 2010 profit rose by 47 percent to a record $2.8 billion.

Twice during 2010, Union Pacific raised its common stock dividend, raising the dividend by 40 percent in 2010. Since 2001, the Union Pacific common stock dividend rate has been raised by 280 percent, for an average of 28 percent annually.

Young called 2010 the “most profitable year in Union Pacific’s nearly 150-year history.

“Economic indicators point to growth [in 2011], and if jobs improve, there will be even greater strength,” said Young, according to progressiverailroading.com. “The bar is raised, and last year the floor was set. We’re setting our sights even higher.”

UP repeated a previous announcement that it will increase its workforce by more than 4,000 in 2011 — an increase of almost 10 percent in its workforce — while bringing back the remainder of furloughed workers.

As for the Washington trip, in which Young said he will be joined by executives from other railroads, the Journal of Commerce reported that Young “strongly complained about the heavy expense of developing and deploying positive train control technology, which means outfitting locomotives with automated braking gear and tying it into trackside warning devices and other remote control systems.”

The railroads’ opposition to PTC — that its costs outweigh benefits — is disputed by independent studies, some commissioned by the Federal Railroad Administration.

The National Transportation Safety Board has long advocated implementation of PTC as a necessary safety overlay. The UTU and other rail labor organizations similarly support implementation of PTC.

Union Pacific will increase its capital spending by 25 percent to $3.25 billion in 2011, reports the Journal of Commerce.

UP capital exenditures in 2010 totaled $2.6 billion.

UP said it will be purchasing as many as 200 new locomotives in 2011, upgrade numerous corridors to accommodate double-stack container cars, and replace a 100-year-old bridge across the Mississippi River at Clinton, Iowa, the Journal of Commerce reported.