A presidential Emergency Board on Saturday made recommendations for ending a contract dispute between 11 unions and the nation’s largest rail freight carriers. For the most part, the recommendations favor the carriers. For example, the board recommended that the unions accept all the health care concessions that the carriers demanded.
The board chose not to consider whether a contract signed last summer by the carriers and the United Transportation Union represented an industry wide pattern, but it used the UTU agreement as a benchmark as it formulated its recommendations. The board’s health care recommendation, except for a minor detail, mirrors the health care concessions agreed to by UTU.
Now that the board has issued its recommendations, a 30-day cooling off period follows during which the unions cannot strike nor can the carriers unilaterally implement a new contract. After the 30-day cooling off period, which ends December 6, the unions or carriers are free to engage in economic self-help, which means the unions could strike or take other action aimed at winning a more favorable deal or the carriers could take similar action.
Union reaction to the board’s decision was muted and mixed. President Freddie Simpson of the Brotherhood of Maintenance of Way Employees Division of the Teamsters (BMWED) in an open letter to members said that the BMWED national bargaining committee would meet with the carriers on Tuesday, November 8 to discuss the recommendations. He also said that he would convene a national meeting in Kansas City on November 30 to discuss the board’s recommendations and their consequences.
He urged members to remain focused and disciplined. “There will be many rumors flying over the next 30 days,” Simpson said. “We must approach the next 30 days in a disciplined and focused manner, showing solidarity with each other and the members of the other unions affected by the board’s report.”
He also told members to visit the union’s website to get accurate and timely information about events over the next 30 days.
Transportation Communications Union President Bob Scardelletti said that the board’s recommendations will produce an average gain of $30,000 for the average TCU member over the next six years, but he noted that the board’s health care recommendations were disappointing.
“We are disappointed in the board’s recommendation of the UTU health insurance plan design changes” Scardelletti said. “We put on a vigorous case that our health plan should be left alone. The (board) rejected our argument. But they did recommend keeping the employee contribution at $200 through at least July, 2016, which is a tremendous benefit.”
Scardelleti said that TCU will bargain toward an agreement based on the board’s recommendations. “The (board’s) recommendations deliver tangible, real wage gains far beyond what is occurring anywhere else in the country,” Scardelleti said. “We cannot risk letting the anti-labor diehards in the Republican Congress get a chance to overturn these findings if
we fail to reach an agreement. We will negotiate hard in the next two weeks for the best possible implementation of the report. Our goal is to reach an agreement to submit to ratification by our membership.”
Regarding the health care plan, the board recommended changes to the Managed Medical Care Program that increase the deductible to $200 per year for individuals and $400 for families. Union rail workers currently pay no deductible. Worker costs for emergency room visits increase from $25 to $75; urgent care costs increase from $20 to $25.
The board also recommended that workers begin paying a 5 percent co-insurance charge up to $1,000 per year for individuals and $2,000 for families and increased payments for Tier II and Tier III prescription drugs. Cost of generic drugs would decrease by $5 per prescription.
The board acknowledged that the cost of these changes would fall hardest on those who are currently receiving medical treatment or who will do so in the future, which was the main reason that the unions opposed these changes.
All of these recommendations are in the UTU contract. Another similar feature is the $200 cap on workers’ share of the premium payment. The cap would remain in effect through July 2016. The board also recommended capping premium increases after 2016 to 15 percent or $230, whichever is smaller.
Regarding wages, the unions proposed a five-year wage increase of 19 percent; the carriers proposed a 14 percent increase. The board recommended a 15.6 percent increase retroactive to July 2010 when the current contract expired. Additionally, the board recommended a lump sum signing bonus equal to 1 percent of straight-time earnings between November 1, 2010 and October 31, 2011.
Unions argued that workers deserved a bigger raise because increased worker productivity had produced record profits for carriers. The board said that it did not take company profits or increased productivity into account when it determined what a fair wage increase would be.