The Interstate Commerce Act was originally passed to protect
shippers and communities, and later amended to include protection for employees, from the
vicious business practices committed against them by railroads. When President Clinton
signed the Interstate Commerce Commission Termination Act on December 29, 1995, the ICC's
successor agency, the Surface Transportation Board (STB) was established. Although a
limited amount of the ICC regulatory duties were transferred to the STB, the statutory
mission of both agencies remained the same--to protect the public: shippers, communities
and employees.
Like its predecessor during the last 15 years or so of its existence, however, the STB
"has lost sight of its statutory mission," said Edward Wytkind, Executive
Director of the Transportation Trades Department (TTD) of the AFL-CIO, testifying on March
31 before the Senate Subcommittee considering the reauthorization of the STB.
"Instead of an agency whose mission is to protect the public, it has become an agency
whose mission is to carry out the wishes of the railroad industry it regulates. Whether it
is rail employees, shippers, competitors or the general public, the STB ignores their
needs and its own statutory mandate." In his statement before the Senate
Subcommittee, Wytkind noted that even Business Week observed in a recent article
that the three-member STB "has been no champion of the consumer" and "now's
the time for Congress to get rail merger policy right."
Wytkind was testifying for the TTD (consisting of 30 affiliated unions, of which 13
rail unions-- including the BMWE-- comprise the Rail Labor Division) which passed a
resolution in March of this year calling for reforms in the STB to protect workers and the
public interest. The text of that resolution follows.
With Surface Transportation Board reauthorization legislation possible this year,
Congress has the opportunity to reign in the power that mega-rail carriers exercise over
workers, shippers and communities. Workers' rights and job security must be enhanced,
safety must take on added importance, and Congress must end the outrageous practice of
discarding private union contracts at the mere request of merging railroads.
Unfortunately, the STB has typically adopted and implemented policies that ignore these
concerns and the effect they have on railroad employees and the overall public interest.
Since the passage of the Staggers Act in 1980, the nation has witnessed an
unprecedented consolidation in the rail industry that has left thousands of workers out of
jobs and has vested unprecedented market power with a few mammoth rail carriers. While the
STB has a statutory obligation to consider "the interests of rail carrier
employees" affected by proposed mergers, not a single proposed transaction has been
rejected or significantly altered because of employee concerns. Workers are promised
generous New York Dock benefits, but in reality the railroads fight making these
protective payments every step of the way by using long, drawn out legal proceedings to
delay or escape fulfilling their obligations to employees.
Not only has the STB refused to protect employees, but it has used a tortured
interpretation of law to cancel out collective bargaining agreements made between
employees and railroads who later argue that the agreement interferes with a pending
merger or acquisition. The STB has extended its authority to justify almost any change
that the carriers request even if it is far removed from what is required to complete a
transaction. If the nation's rail carriers want to make changes to private collective
bargaining agreements, then they should do what every other company with a collective
bargaining relationship must do--sit down with the employees and negotiate an agreement.
Transportation labor calls on the Congress to finally put a stop to the practice of a
federal agency trampling on the private contract rights of thousands of taxpayers who work
on America's railroads.
We are also concerned about the lack of attention that has been paid to ensuring that
rail transactions are completed in a manner that will not jeopardize the safety of workers
and the public at large. We need only look at the problems that Union Pacific is
experiencing as it attempts to complete its merger with Southern Pacific to understand the
terrible impact a merger can have on safety. The STB has recently entered into a
rulemaking designed to ensure that the safety concerns of rail transactions can be fully
evaluated before approval is granted. While we support imposing new safety requirements on
merging railroads, we suspect that there will be attempts to weaken this rule by excluding
certain transactions or limiting the amount of information that rail carriers must
provide. It must be recognized that the STB has an obligation to ensure that the
transactions it approves, regardless of the size or type of applicant involved, will not
put workers or the general public at further risk.
Shippers and their employees who are dependent on rail transportation also find
themselves at the mercy of virtual rail monopolies. Transportation labor has long
maintained that the reduction of competition in the rail industry causes devastating job
cuts, harms the economy and communities, and is contrary to sound transportation policy.
The massive consolidation also threatens the motor carrier sector where hundreds of
thousands of Teamsters are employed. While operators in competing transportation modes
fight over market share, the gains on one side always come at the expense of workers on
both sides as carriers play the cut throat game of downsizing and squeezing more out of
fewer employees.
As rail mergers and other transactions continue to reduce transportation options and
market power is further concentrated, it is increasingly important that the role of the
STB be reexamined. While transportation labor continues to evaluate proposals to increase
competition or address shipper-carrier issues, we know from first-hand experience that
massive and unrestrained consolidation in the railroad industry without regard to the
needs of shippers, communities and employees, and to the transportation system itself, has
been disastrous. We will continue to be mindful of this fact as Congress considers rail
competition proposals.
Some have suggested that the STB, as currently structured, is simply incapable of
fulfilling its public interest obligations and should be disbanded with its
responsibilities parceled out to other government agencies. While this is not a new
proposal, it has surfaced again because many believe the STB may have outlived its purpose
or is too close to the industry that it is charged with overseeing. Transportation labor
is seriously examining such a proposal. Meanwhile, to help guard against potential
conflicts of interest, we propose that STB members be subjected to a "revolving
door" policy curtailing their participation in the industry once their service
terminates.
It is clear that Congress must take every opportunity to force the STB to perform its
statutory responsibility to protect the public interest and ensure that protections
embodied in statute are carried out in practice, and that voices other than those railroad
executives are heard. Workers, shippers, communities, and state and local governments
deserve nothing less; Therefore, be it
RESOLVED, That TTD will insist that Congress put a stop to the Surface Transportation
Board's practice of breaking or making wholesale changes to privately negotiated labor
agreements; and be it further
RESOLVED, That TTD will work with its affected affiliates to evaluate and respond to
legislative proposals to reign in the power of large railroads; and be it further
RESOLVED, That TTD will advance the views expressed in this statement to the Clinton
Administration and to the House and Senate authorizing committees. |