UTU News Digest - Monday, February 1,1999

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Monday, February 1, 1999

CSX agrees to settle race discrimination case, reportedly for $25 million

JACKSONVILLE, Fla. -- CSX Transportation Inc., the nation's third-largest railroad company, has settled a class-action lawsuit claiming race discrimination, reportedly for $25 million.

The settlement affects thousands of black union employees. The workers' suit, filed in 1994, accused Jacksonville-based CSX Transportation of discriminating against black workers in employment policies, practices and procedures.

Although the parties agreed to keep details of the deal secret, they were published Friday in The Florida Times-Union. The newspaper said it obtained a draft settlement document mailed to the plaintiffs in early December, just prior to its approval by the court.

U.S. District Judge U.W. Clemon in Birmingham, Ala., who approved the settlement Dec. 17, on Friday overruled an objection to it by a former employee, said Shirley Brown, the judge's docket clerk.

James Davis of Fitzgerald, Ga., a former employee who reached a disability settlement with CSX Transportation in 1996, had filed his objection because he does not think the settlement went far enough.

CSX spokesman Kathy Burns wouldn't comment on the substance of the settlement Friday. "The settlement is not a reflection of the merits of the case," Ms. Burns said, adding it was settled to avoid the costs of litigation. "We at CSX Transportation have zero tolerance for any form of discrimination."

In addition to 12 individual plaintiffs and two unions who brought the complaint, the lawsuit represented black union employees in transportation, engineering and mechanical areas, and who had been employed by the company since June 1991.

About $18.5 million of the settlement will be divided among the plaintiffs based on their individual grievances, with the larger individual settlements going to the people who were named as plaintiffs, the Times-Union reported.

The balance of the settlement, including $5 million for lawyers, will be used for legal fees and administrative costs.

The Times-Union also reported that the company agreed to implement changes including more training for black employees in math, computer and supervisory skills.

STB to hold CN/IC merger voting conference on March 25

WASHINGTON -- The Surface Transportation Board (STB) has scheduled March 25 for its voting conference on the $2.4 billion merger proposed by Canadian National Railway Co. and Illinois Central Corp.

The board also scheduled oral arguments for March 18 on the plan that would create the first major North American railway.

With an accompanying marketing alliance that involves Kansas City Southern Railway Co., the merged CN and IC can offer service stretching across Canada through the U.S. heartland to Mexico as well as to port facilities on the Gulf of Mexico.

Past STB voting conferences in merger cases have shown what the agency's final ruling will be. The STB attaches conditions on mergers to handle any effects it predicts will be negative, such as reduced competition or environmental problems.

The final decision still will be issued May 25, according to the decision issued Wednesday. If approved, the applicants can close the transaction 30 days later. To date, the CN-IC plan has encountered opposition from Union Pacific Railroad, Canadian Pacific Railway and some Louisiana shippers.

UP seeks to derail the merger altogether, because it opposes the KCS marketing alliance, while CP is seeking ownership changes of a jointly owned rail tunnel near Detroit. Shippers who oppose the deal are seeking additional competition for their facilities.

Parties that seek to participate in the oral argument must notify the board in writing by Feb. 9, tell the board their position on the merger, what issues will be addressed and how much time will be required.

Journal of Commerce: Rails, unions "may" unite in lobbying effort

WASHINGTON -- U.S. railroads, in a bid to defeat a legislative push by shippers to boost competition, have won the conditional support of two unions.

A breakthrough alliance of labor and management could strengthen the carriers' hand as they try to convince Congress not to rewrite the mission of the Surface Transportation Board, whose future will be debated on Capitol Hill this spring.

The first sign of the budding alliance on those commercial issues is a March 3 event called "Destination DC," a lobbying blitz organized by the Association of American Railroads, the American Short Line and Regional Railroad Association and the Railway Progress Institute, an equipment-supplier group.

The carriers are counting on support from the United Transportation Union and the Brotherhood of Locomotive Engineers, which represent 40% of active rail employees. Both have offered conditional backing to "Destination DC," but have not given their final support.

Any union support for the carriers' position is important because rail labor has demonstrated substantial lobbying muscle and credibility on Capitol Hill.

"Destination DC" appears to steal a march on a previously announced move by shipper groups such as the Alliance for Rail Competition and 11 trade associations. Those groups, which are pressing for legislative changes to broaden rail competition and redirect STB policy, set their own lobbying and education meeting for March 17-18 in Washington.

The carriers' pitch to labor proposes that more competition would reduce freight rates and profit and squeeze companies' ability to offer wage increases when contract talks begin this fall.

But labor has an additional agenda for the STB reauthorization.

Unions, working through groups like the Transportation Trades Department of the AFL-CIO, want guarantees in the STB reauthorization that the board will not abrogate privately negotiated labor contracts in future rail merger decisions.

"We intend to defend the sanctity of those agreements that continue to be destroyed by a skewed process that harms thousands of rail workers," said Ed Wytkind, who directs the TTD. "We intend to come out of this (STB reauthorization) process with protection of the workers' labor agreements."

The outcome of the STB debate is uncertain in the Senate, where a bill that would reauthorize the agency without any policy changes has been introduced. Majority Leader Trent Lott, R-Miss., and Sen. John McCain, R-Ariz., who chairs the Commerce, Science and Technology Committee, support that measure. But at least two other Senate bills that would make some competitive policy changes are expected to be introduced in the coming weeks.

In the House, Transportation and Infrastructure Committee Chairman Bud Shuster, R-Pa., favors no changes to the STB's mission.

Additional moves are expected to force the STB to adopt the unions' position.

Steve Hart, vice president of the AAR, said the March 3 event was not a reaction to the shippers' meeting. He said "Destination DC" was in the works since December, before the shippers' plans were disclosed publicly last month.

Additional carrier efforts to win additional labor support for preserving the status quo on rail competition and access are expected in the coming weeks.

"The economic health of the railroads affects union members' lives," Mr. Hart said. "There is a complementary interest for them. This (Capitol Hill campaign) will be an opportunity for us to bring members from various segments of the industry to DC to inform and educate members of Congress and their staffs about issues that are critical to the viability of the rail industry."

Among the issues he cited were the dangers of reregulation, the carriers' code word for broad changes to existing policies.

"A significant message will be that reregulation will take us back in time," Mr. Hart said. "If anyone stopped to think about it, that is not where they would want to go."

Carriers want to deliver a history lesson of sorts to members of Congress and staff members who were not in Washington when the Staggers Act was passed in 1980.

The carriers believe that law pumped new life into a floundering rail industry, resulting in lower rates for shippers and renewed carrier profitability that hit record levels in the mid-1990s.

For labor, the story is different. Between 1980 and 1997, the rail work force, which is 90% unionized, shrunk from 532,000 to 252,000 employees. Most of those job -- and union membership -- losses occurred in the 1980s. The decline in rail employment flattened out during the 1990s and jobs have stabilized at about 255,000. Average wages doubled between 1980 and 1997.

Next month's carrier-led personal lobbying effort will cover all members of both House and Senate committees that have jurisdiction over rail issues, as well as other key members in both houses of Congress. A broader education campaign with written materials is intended to reach every member of Congress.

Pennsylvania State Transportation Commission adopts 12-year program

HARRISBURG, Pa.-- The state Transportation Commission last week adopted an updated 12-Year Transportation Program that calls for a $26.7 billion investment in highways, bridges, and rail, aviation and public transit facilities.

"This action today embraces historic levels of transportation investment for Pennsylvania," said Transportation Secretary Bradley L. Mallory. "It reflects the twin benefits Pennsylvania is realizing from the TEA-21 federal transportation law and the additional revenue Gov. Tom Ridge and the General Assembly agreed to in 1997."

TEA-21, enacted last year under the leadership of Congressman Bud Shuster (R-PA), increased federal transportation funding for the state by roughly 45 percent.

Meanwhile, state Act 3 of 1997 has pumped approximately $400 million a year more into highway and bridge projects in Pennsylvania.

"Absolutely, these investments are making a tremendous difference for Pennsylvania," Mallory said. "Drivers around the state can see the impact in long-dormant projects taking shape and in the steadily improving pavement conditions. Mass transit, aviation and rail freight, likewise, continue to see vital state support in this update. This is the embodiment of Gov. Ridge's vision of a world-class, 21st-century transportation network for Pennsylvania."

Secretary Mallory praised U.S. House Transportation and Infrastructure Committee Chairman Shuster for his leadership in fashioning TEA-21.

"No question, without Chairman Shuster, Pennsylvania would not be in line for the high level of federal investment that is coming our way," Mallory said. "Chairman Shuster fought very hard for an equitable distribution of federal funds that recognizes Pennsylvania's distinctive transportation needs."

The first four years of the updated Transportation Program includes $8.4 billion for highways and bridges; $1.7 billion for public transit; $870 million for aviation; and $48 million for rail freight.

The 15-member Transportation Commission includes the Transportation Secretary; 10 appointed citizens; and the majority and minority chairmen of the Senate and House Transportation committees.

For more information, or a copy of the list of major projects included in the 12-Year Plan, call Rich Kirkpatrick of the Department of Transportation Press Office at 717-783-8800.

Vote keeps the 28-mile so-called 'Center Line' proposal on track

LOS ANGELES -- A proposed urban rail system for Orange County would provide access to Edison International Field of Anaheim, the Pond at Anaheim, South Coast Plaza and the Irvine Medical Center for an estimated 50,000 to 62,000 daily riders, if transportation planners have their way.

The 28-mile so-called "Center Line" would connect six cities and include 26 stations from downtown Fullerton to the Irvine Spectrum beginning as early as 2008.

The question remains whether such a rail system -- at a cost of at least $1 billion--will ever become reality, but Monday's vote by transportation board members to go forward with an environmental impact study of the tentative routes keeps the process on track.

"This starts one of the most important chapters in the whole thing," said John Standiford, a spokesman for the Orange County Transportation Authority.

A vote on the rail project is scheduled for the end of the year. If approved, construction of the ambitious project--paid for largely with state and federal Funds -- could start as soon as 2003.

The proposals vary dramatically in cost and look. The most expensive is a $1.86-billion elevated system. Two less expensive alternatives would lay tracks on the ground at a cost of $1.27 billion and $1.5 billion. Supervisor Todd Spitzer said the cost of the project continues to be a concern. Spitzer, who has not made up his mind on the feasibility of building a rail system in the county, said Monday he was shocked to learn that the current estimates for construction do not include the costs of buying land along the proposed routes.

"The cost of this project is much larger than what we've seen on paper because they have not taken into account right-of-way acquisition," he said.

Transportation officials say they are still exploring the idea of a rail system, stressing that plans are not set in stone. One proposal is not to build a rail system at all but rather to improve the roads in the area and expand bus service and Metrolink commuter rail service in the county.

Canada rail freight down 6.5% in week to Jan. 14

OTTAWA -- Canadian rail freight volume, excluding intermodal traffic, totaled 4 million metric tons in the week ended Jan. 14, down 6.5% from a year earlier, Statistics Canada said.

The number of rail cars loaded during the week declined 4.3% from a year earlier.

Intermodal (piggyback) volume totaled 306,000 tons in the week, up 20.4% from a year earlier.

Total traffic in the week, including carloadings of freight and intermodal traffic, declined 5% from a year earlier. For the year to date, traffic totaled 7.7 million tons, down 5.7% from a year earlier.