STB Finance Docket
A. Boyd, Jr., Assistant President
S. Hinckley, General .Director Labor Relations
The parties to this dispute are the United Transportation Union and the
Union Pacific System/ Southern Pacific System. In Finance Docket No.
32760, the U.S. Department of Transportation, Surface Transportation
Board (STB) approved the merger of the two systems which included
various rail entities.
In accordance with New York Dock provisions the Carrier served notices
on the Organization's General Chairmen covering two geographical areas
referred to by the Carrier as the Salt Lake Hub and the Denver Hub. The
parties in their submissions detailed the negotiating dates which
covered approximately a 120 day period. The parties were unable to reach
an agreement and a request was made for arbitration in accordance with
New York Dock. . The parties were unable to jointly select an arbitrator
and through' a joint letter to the National Mediation Board requested
that one be appointed. By letter dated February 21, 1997 the undersigned
was appointed by the National Mediation Board.
This arbitration is somewhat unique in that in addition to the normal
terms and conditions of arbitration, under New York Dock, the
Organization requested arbitration of what is known as the
"commitment letter". This letter was signed by the Carrier and
addressed to the Organization's President and provided for certain
commitments with regards to the entire merger process beginning with the
Carrier's filing with the STB. It is the Organization's position that
the Carrier did not live up to the commitments and as a result the
issues raised therein should be arbitrated.
Two separate arbitration presentations were made beginning on March 25,
1997, one covering the commitment letter and the other the terms and
conditions to govern the two Hubs. Since these two hearings are so
intertwined, they shall be dealt with in this one award.
The purpose of the letter was to 1. Limit the Organization's exposure in
the merger to items "necessary" to completing the merger, 2.
Gain protection certification under New York Dock for a number of
employees/ and 3. Give affected General committees an opportunity to
develop a seniority system for the merged areas.
In exchange, the Carrier wanted 1. the UTU's support for the merger and
operating plans, 2. the Organization's recognition that some changes
were "necessary" in the merger and, 3. a seniority, system
that was not illegal, administratively burdensome or costly.
It is apparent that the writer and the addressee of the commitment
letter understood the benefits of a simpler merger process than- the
parties had previously undertaken: however, the negotiators on both
sides failed to see the same benefits and in essence pushed the envelope
too far. Both parties included items in their proposals that went beyond
what was necessary. While the Organization was the moving party in
requesting arbitration over the letter, their proposals included several
unnecessary items such as changing work rules, cherry picking work
rules, certification beyond the number in the commitment letter in lieu
of relocation and a seniority system that was .administratively
burdensome and potentially more costly.. However, when the Carrier's
proposals, which included an unnecessary 25 mile zone and crew consist
changes are brought before this arbitrator, it is not difficult to say
that anything beyond what was contemplated in the commitment letter will
not be used to escape any commitment to provide for automatic
certification as provided later in this award, because the parties
failed to make a voluntary agreement.
It is apparent to this arbitrator that not all the parties to the
negotiations are aware or understand the value the Organization received
by the letter. Some members of the Organization's negotiating team
apparently feel there is no need to reach a voluntary agreement in order
to achieve automatic certification and have made demands that most
certainly will not lead to such a voluntary agreement. On the other
hand, as mentioned above the Carrier has reached beyond the limits that
would be acceptable to creating a voluntary agreement.
Neither party should take comfort in future negotiations that this award
provides for future automatic certification. The commitment letter is an
example of responsible recognition of the needs of both parties and for
the first round of merger negotiations/arbitration this arbitrator
simply will not substitute his judgement for those behind the commitment
One of the key areas of dispute deals with what is "necessary"
to accomplish the merger. In reviewing previous mergers and the need to
coordinate employees and operations at common points and over parallel
operations/ it is proper to unify the employees and operations under a
single collective bargaining agreement and single seniority system in
each of the two Hubs. This does not mean the Carrier has authority to
write a new agreement, but the Carrier's selection of one of the
existing collective bargaining agreements to apply to all those involved
in. a Hub as proposed in this case is appropriate.
While selecting one existing collective bargaining agreement puts many
issues to rest, both parties recognized in the letter that other changes
may be necessary for a merger to accomplish a smooth flow of operations.
These changes, however, were not to be monetary but operational. Such
operational changes would include the combining of yards into single
terminals, consolidating pool freight, local and road switcher
operations and combining extra boards into .fewer extra boards that
would cover the more expansive operations of the two Hubs.
Seniority is always the most difficult part of a merger. There, are several different methods of putting seniority together but each one is a double-edged sword. In a merger such as this one that also involves line abandonments and alternate routing possibilities on a regular basis, the tendency is to present a more complicated seniority structure as the Organization did. What is called for is not a complicated structure but a more simplified one that relies on New York Dock protection for those adversely affected and not perpetuating seniority disputes long into the future. The Carrier's proposals fairly address the issue in both Hubs.
are two issues that must be addressed with regards to crew consist. The
first is the special allowance/productivity fund issue and the second is
the Carrier's request for the least restrictive yard/local provisions to
overlay the Eastern District agreement. The second is easier to deal
with. If the Carrier believed that another agreement would better fit
this area, .it had the opportunity to select that agreement for this
area in total. Since it did not/ this arbitrator will not give a
separate crew consist provision to them. The Eastern District .agreement
covers this area with respect to crew size and work in both yard and
The special allowance/productivity funds must be coordinated. This
arbitrator does not see any undue advantage to the Carrier in its
proposal to pay out the existing funds and create a new one. Those who
would have been eligible for a productivity fund and special allowance
had they worked under the Eastern District -agreement since their entry
into train service shall be entitled to them under the new plan.
Those who sold their special allowances/productivity funds
previously are not entitled to a windfall now and would not be
eligible" for those payments regardless of their seniority date.
Without the commitment letter, the Carrier is not required to certify
any employees as protected. The letter identified a number of employees
to be protected and the Carrier's notices, as amended, identified a
larger number. Since the Carrier's proposal exceeded the commitment
letter, it should protect the larger number referenced in its notices.
If the Eastern District General Chairman and Carrier are not able to
agree within 30 days of this Award who the specific employees are, then,
it shall be the employees whose assignments are involuntarily changed
until the number in the notices is reached. If both proposals were
proper and were not over reaching, as they were here, then this
arbitrator would not have imposed this provision.
I have identified the major issues in more detail above and now turn to
the. proposals. In reviewing the proposals, " this Board finds that
the Carrier's proposals, including questions and answers, for each Hub,
submitted to this panel are appropriate for inclusion as part of this
Award except for the following:
Salt Lake City proposal:
Denver Hub proposal:
1. Article IV B (1) concerning the 25 mile zone.
Copy of Carrier's proposed implementing agreement for the Salt Lake Hub
and the Denver Hub are attached hereto and made a part of this Award.
This arbitrator is convinced from the facts of record that the changes
contained in the Carrier's proposals as modified by the exceptions noted
herein are necessary to effectuate the STB's approved consolidation and
yield enhanced efficiency in operations benefiting the general public
and the employees of the merged operations.
This Award is final and effective immediately. Should the Organization
and the Carrier desire to continue negotiations over other elements then
they should so proceed. These negotiations should be between the Eastern
District General Chairman and the Carrier. These would be voluntary and
not subject to Section 4 New York Dock arbitration if they do not prove
Signed this 14th day of April 1997.
James E. Yost, Arbitrator