By the time you read this, if you are a
member covered by the national agreement, you should have received a
packet containing a ballot and information about the tentative
national agreement reached on March 8, 2001.
An International Association meeting was held in Kansas City,
Missouri on March 27 to go over in detail the provisions of the
tentative agreement and to make the necessary preparations to send it
out to BMWE members for ratification. Packets containing the ballots
were then mailed on April 27.
Returned votes will be counted on May 30, 2001, in Washington, DC
by an independent firm and the results will be published in the
June/July issue of the BMWE JOURNAL.
"Our ultimate goal is to ensure that our membership is as
fully informed as possible when they cast their votes in the
ratification process," said BMWE President Mac A. Fleming. To
achieve that end, an information packet was sent to each member,
information was posted on the BMWE website, and system officers
attended as many local meetings as possible to review the agreement
and answer any questions.
The tentative agreement reflects the political realities the BMWE
faced once George W. Bush was selected president. The BMWE was faced
with very difficult options — none of them good for BMWE members —
once the Supreme Court chose Bush as president.
The BMWE’s bargaining process is directly and significantly
impacted by federal law and the executive branch of the federal
government. An executive branch agency, the National Mediation Board,
has jurisdiction over bargaining and mediation and so long as it does
not release the parties from mediation, neither side can resort to
self-help.
Even when the NMB releases the parties, the president has the right
to halt self-help by appointing a presidential emergency board. A PEB
then conducts "fact finding" hearings and issues
recommendations to resolve the dispute. Although the findings are not
legally binding, and either side can reject the recommendations,
Congress generally intervenes directly after one or the other side
resorts to self-help to impose either the recommendations of the PEB
or a final and binding arbitration process.
BMWE reached a bargaining impasse with the railroads in June 2000
and asked the NMB to release the parties. At that time the railroads
made harmful proposals — to contract out production work;
cut-away-from-home expenses; weaken the Feb. 7, 1965 Job Protection
Agreement; weaken seniority in bidding and assignment rules, just to
name a few.
The BMWE extended bargaining committee felt that if the NMB had
released us from mediation in June, President Clinton would have
appointed a board which would have evaluated the situation fairly. The
NMB, however, simply functioned as an agent of the railroads and
refused the BMWE’s request.
Again, in December 2000, the BMWE pushed for a release with the
help of the AFL-CIO. Again, the NMB refused.
In January, George W. Bush became President of the United States.
The last national PEB appointed by a Republican President Bush was PEB
No. 219 in 1991. That Board’s recommendations were legislated by
Congress. The result devastated work rules, brought managed care, the
first-ever health care cost-sharing, and gave below inflation wage
increases.
PEB 219 was a watershed for BMWE. Although all of Rail Labor was
injured by PEB 219, BMWE members, in addition to the paltry increases,
suffered immensely more serious injuries because of the nature of
their work and their work rules.
"We learned at that time that because we have so much more at
stake than wages and health care," said President Fleming,
"we must be extremely aware of the political environment in which
we function. What is a cold to most of the other crafts is double
pneumonia to BMWE."
Within two weeks of taking office, the new President Bush and the
Congressional Republicans (joined by certain renegade Democrats) began
attacking labor on all fronts.
Within two months, they repealed ergonomic regulations that target
repetitive motion injuries and reversed a whole series of Clinton
Executive Orders that were sympathetic to labor. Worse, Bush appointed
an airline PEB to block the Northwest Airlines mechanics’ exercise
of self-help.
The BMWE’s worst fears were confirmed. This Bush administration
is acting in an aggressive and systematic way to aid Big Business at
the expense of employees.
Given these facts of life, it was clear to the bargaining committee
that any presidential emergency board appointed by Bush would not lend
us a sympathetic ear. And even a fair PEB would have a hard time
avoiding the fact the railroads are having problems with their
revenues and stock prices (even if most of this can be blamed on their
ill-advised mergers of the last several years). And once more, it is
undeniable that health and welfare premium costs have exploded, making
greater cost-sharing virtually inevitable.
Given the political and economic realities the BMWE faced, the
bargaining committee negotiated the best agreement it could, rather
than risk an all but certain worse result from a Bush PEB. But
the bargaining committee is providing BMWE members with the final
decision. We are telling our members what risks are likely if they
reject the agreement but with the firm belief that if our members want
to take the risks associated of going to a Bush PEB, they should be
given the opportunity to choose that avenue by rejecting this
agreement. On the other hand, as union representatives taking the
political risks of making such an agreement, we feel our members
should not simply be given no other option but calamity if something
less than that can be agreed to.
Following, in brief, is what was achieved in the tentative
agreement:
Article I Wages:
a) COLA-based General Wage Increases On January 1,
2001, there is a 3.5% general wage increase (GWI) (minus 27 cents an
hour already received) rolled into the existing rates of pay. Then,
there will be general wage increases on July 1 of this year, and
annually on July 1, 2002, July 1, 2003, and July 1, 2004. Those
general wage increases will be in the form of a cost of living
adjustment that rolls into the basic rates of pay. So, if the consumer
price index goes up by 3%, the result will be a proportional cents-per
hour-increase.
The last National Agreement had a series of lump sums and specific
percentage increases. Obviously, lump sums do not roll into the basic
rates of pay, so general wage increases are usually preferable.
With a cost of living adjustment arrangement, it is possible that
if inflation remains very low, the yield could be less than if there
were general wage increases and lump sums. However, if the rate of
inflation should average above percentage increases and the value of
the lump sums, then BMWE members do better. The cost of living index
may rise more sharply in the next period because of energy price
spikes.
"We cannot predict the future. But we know this for certain,
analysis by one of our economists has shown us that, if we had cost of
living adjustments instead of lump sums and GWI’s since 1978 our
members woul be averaging $2.23 per hour more than they are earning.
So, we opted for COLA-based increases," said President Fleming.
b) Health and Welfare Offsets: Ever since PEB No. 219,
there has been health care cost-sharing that took the form of
deferrals from the so-called Harris COLA formula. While the Harris
COLA formula starts with a full COLA, it was subject to limitations
and caps.
The maximum CPI increase that could be taken into account in any
given adjustment period was 3%, and only half of the increase in the
CPI in any measurement period could be taken into consideration. With
those limitations, the Harris COLA could yield no more than one-half
of the increase of the cost-of-living. In addition, the Harris COLA
formula provided that the cents per hour be produced by dividing
one-half of the increase in the payment rate for health and welfare
benefits, by the average straight-time equivalent hours up to a
maximum of one-half of the cost of living allowance.
Put simply, up to one-half of the increase could be diverted to
offset increases in health care premiums. The Harris-type COLA will be
in place starting July 1, 2005.
Cost of living GWIs will also be subject to health care offsets.
The cost sharing begins with the second general wage increase; it will
reduce the COLA adjustment by 35% of the increase in the health
insurance premiums. The offsets rise to 40% of the increase in health
insurance premiums at the third general increase (7/1/2002); 45% in
2003, and 50% in 2004.
In no case can more than one-half of the increase resulting from
COLA increases be diverted into cost-sharing. But unlike the Harris
COLA, the GWI COLA is not subject to the 3% per year cap, nor does it
take only half of the change in the consumer price index into account.
Instead it is a full COLA; but subject to the health care cost
offsets.
Why did the BMWE agree to this? We know that our employee
contributions to health and welfare premiums are among the lowest in
industry. Considering the big recent spike in health care premiums,
the carriers would have a strong case before a PEB or an interest
arbitration. No one will pretend that these offsets are a good
outcome. However, given the overall risk to BMWE membership of a Bush
PEB, common sense dictated that we swallow the health and welfare cost
sharing package as part of an overall deal.
The BMWE did, however, continue to raise the issue of our members
being treated differently from other craft employees in the event the
carriers negotiated something different on health and welfare with the
other crafts. On April 6, Robert F. Allen, the carriers’ bargaining
representative, advised the BMWE in writing:
Therefore, we assure you that in the event we negotiate with
the other rail labor organizations during this round a health and
welfare package and/or health and welfare offsets that differ from
those contained in our Tentative agreement, BMWE will have the
option to elect such alternative arrangement.
Article II Eliminates Current Harris-COLA; Reinstates Harris COLA
in 2005.
Article III Optional Alternative Compensation: This program
does not compel the BMWE to accept any alternative compensation
scheme, such as stock options. Any arrangement in lieu of general wage
increases requires voluntary agreement of labor and management, and is
not something that can be sent to final and binding
arbitration.
Article IV Supplemental Sickness: Section 1 increases
benefits to "restore the same ratio of benefits to rates of pay
as existed on December 31, 1999." There is a second adjustment on
December 31, 2004, (Section 2). So, we have obtained supplemental
sickness increases that track those that we’ve obtained in the past.
In addition, Section 3 fixes the problem of when an employee is
released by his doctor to return to work and he has not been released
by the carrier’s medical officer under this settlement. Now, he will
continue to draw sickness benefits until he is found to be medically
qualified.
Article V Health and Welfare Plan: Some significant
improvements in the health and welfare plan were obtained. These
include an improved routine physical examination benefit; childhood
immunization; improvements to child speech therapy; "PKU"
tests; improved pregnancy benefits; improved allergy shot benefits;
hearing aid benefits of $600 annually; plan life insurance increased
from $10,000 to $20,000 with accidental death and disability increased
from $8,000 to $16,000; and, vision care goes from "select"
to the better "standard" plan.
However, prescription drug co-pays have been revised upward.
Generic drugs will now have a $5 co-pay, and brand name drugs will
have a $10 co-pay. Under the mail-order prescription drug program,
generic drugs will have a $10 co-pay, and brand name drugs will have a
$15 co-pay.
These are relatively modest increases in prescription drug
co-payments. Significantly, the BMWE avoided the sort of
"formulary" restrictions that steeply increase the prices of
non-generic drugs. We did not want the cost-containment scheme to
decide what drugs were appropriate. That ought to be up to one’s
physician and we believe that we have preserved that principle with
this outcome.
Article VI - Expenses Away from Home: The maximum
reimbursement for actual reasonable lodging expense under the Award of
Arbitration Board No. 298 increases from $26.75 to $29 per day. Meal
allowances increase to $7.50, $15.50 and $23 per day. Actual lodging
and meal maximums increase from $48 to $52 per day. These increases
are effective July 1, 2002.
There is a second adjustment on January 1, 2005, taking the actual
reasonable lodging expense benefits to $32 per day, meal allowances to
$8, $17 and $25 respectively, and actual lodging and meal maximums top
out at $57 per day. On non-298 roads, allowances will not be less than
those provided for 298 roads.
In bargaining, the carriers complained that our away-from-home
expenses were simply too high, so the bargaining committee could only
conclude that they would be under attack at a PEB. In addition, we
know that, while we played catch-up in the 1996 National Agreement,
there had been a long erosion of the value of our expense allowance.
This settlement keeps up our progress in travel allowance
improvements, instead of a freeze or a reduction in the benefits.
Article VII Travel Allowance: This article simply provides
that where an employee does not reside on the employing carrier’s
system, he’ll be deemed to travel from the home station located
nearest to his actual residence.
Article VIII General Provisions: This is standard
moratorium language which withdraws the parties Section 6 Notices and
permits service of new notices on November 1, 2004 with changes not to
become effective before January 1, 2005.
There are also several side letters:
Side Letter 1 simply commits the carriers to work with us to
improve information sharing concerning employment information
pertaining to BMWE members.
Side Letter 2 sets forth what would happen if there was a decrease
in health care premiums. We wanted this because if there were to be
decreases in the premiums (for example, if some new cost-savings
program actually reduced plan expenses), then we wanted to make sure
that we would get the money diverted to cost-sharing back in wages,
pro rata.
Side Letter 3 says there could be health care plan premium
increases resulting solely from our craft leaving hospital
associations on account of the increased employee cost-sharing of this
agreement. If that is the case, then the initial cost of absorbing
those employees into the plan would not be taken into account
as premium increases that we would have to share.
Side Letter 4 has each of the parties acknowledging that, while we
are agreeable to do a "bare bones" agreement to put this
behind us, that says nothing about the importance of other issues we
had on the table.
For example, the BMWE sought national pay rates. There are
properties where BMWE rates of pay need to be normalized upward,
especially where rate disparities resulted from railroad mergers. We
didn’t want to let the carriers tell a future arbitration or PEB
that we abandoned this issue, because that wasn’t the case.
While certain rates may be protected by New York Dock labor
protective provisions at present, we have not abandoned the rate
equalization issue. Instead, we had to defer it to the next round of
negotiations. In addition, we have agreed to create and support a BMWE
committee to deal with the problem of rate disparities that exist on
the nation’s railroads. This will be a BMWE-wide effort to deal with
a serious problem.
Unlike the PEB 219 imposed agreement which has 19 Articles, or the
1996 National Agreement with 18 Articles, there are no Articles beyond
the eight. Instead, this is a "bare bones" agreement.
While the BMWE did not make the same sort of progress it did in the
(PEB No. 229) 1996 National Agreement, this agreement should be
evaluated by what is not in it.
The carriers do not have the right to "exit"
maintenance of way production work. We have not given up our
updates of the February 7, 1965 Job Protection Agreement nor the 1996
Conrail sub improvements that have been so important in providing an
income flow to hundreds (perhaps thousands) of our members during the
recent furloughs. The carriers did not obtain the right to act
unilaterally concerning starting times, the work week, nor were they
able to cut travel allowances or away-from-home expenses. This
agreement keeps all these important rules out of harm’s way.
The BMWE extended bargaining committee met before each bargaining
session with the carriers as well as at other times during the
bargaining round. They had the benefit of the best ideas of Grand
Lodge officers, system officers, and appointees. A variety of tactical
and strategic alternatives were considered. Finally, when we were
unable to obtain a release and a Clinton Board, we came to a
collective (if reluctant) conclusion. We would negotiate to get the
best possible deal we could under the circumstances, and put it out to
our members for ratification.
"We believe that we have done the right thing," said
President Fleming. "While the wage/health and welfare
cost-sharing component is tough to take, we walk away with the gains
of PEB No. 229 virtually untouched. Given the political and economic
realities we face, the bargaining committee is recommending that this
agreement be ratified." |