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Title: Amalgamated Transit Union and Laidlaw Transit Services, Inc
Date: May 10, 2005
Arbitrator:  John F. Wormuth
Citation: 2005 NAC 111

In the Matter of Arbitration

between

Amalgamated Transit Union

Local # 1433

and

Laidlaw Transit Services, Inc



John F. Wormuth
Arbitrator

 

Arbitrator’s Case No. 04-A-129
Federal Mediation and Conciliation Service Case
# 04-57344

 

                                     Date:  May 10, 2005  

 

INTRODUCTION

             This arbitration arises from a grievance filed by Richard Johnson, Vice President, Amalgamated Transit Union Local # 1433 on behalf of itself and for all Laidlaw Operators with a seniority date of hire from February 15, 1999 to December 27, 1999, hereinafter referred to as the Grievant(s), whose classification is covered by the terms and conditions of employment of the Labor Agreement (LR), in full force and effect between Amalgamated Transit Union Local # 1433, hereinafter referred to as the Union, and Laidlaw Transit  Services Inc, hereinafter referred to as the Company. The subject of this arbitration is the January 28, 2004 grievance alleging a violation of Article 40, Section 1, and Operator’s Wage Rates of the Collective Bargaining Agreement (CBA).  The Grievant alleges that the Company is not paying the proper wage rate for Operators with a hire date of February 15 to December 27 1999.
            This arbitration was heard on March 17, 2005 commencing at 8:45a.m. at the offices of Federal Mediation and Conciliation Service, 3225 North Central Avenue, Suite 812,  Phoenix, Arizona.  
            The parties, from a list submitted by the Federal Mediation and Conciliation Service, Case # 04-57344, unanimously selected John F. Wormuth as the Arbitrator in this arbitration, to render a final and binding award.  The parties agreed that this arbitration was timely and properly before the Arbitrator and that all procedural requirements had been met.
             Closing briefs on behalf of Union and Company were submitted and accepted.
             No other briefs or submissions were proffered and the Arbitrator requested none.  Prior to testifying, all witnesses were administered an oath or affirmation by the Arbitrator.
             The Arbitrator did take detailed notes and used a tape recorder. Prior to the taking of evidence the parties were informed that the notes and recording of this arbitration were for the exclusive use of the Arbitrator and would not be shown to anyone. The record of this arbitration was closed on April 18, 2005, upon receipt of the closing briefs from both the Union and the Company.
            The parties were given full opportunity to present evidence, examine and cross-examine witnesses, produce exhibits and present argument, and availed themselves of the opportunity to do so. The Union introduced 5 exhibits, marked Union 1 thru 5, and the Company introduced no exhibits. The parties introduced two joint exhibits, marked 1 thru 2, and having been admitted into evidence, were incorporated herein by reference.

APPEARANCES

ON BEHALF OF Amalgamated Transit Union Local # 1433

                                                       Eddie L. Banks, President
                                                       Richard Johnson, Vice President

 

GRIEVANT:  Richard Johnson, Vice President, on behalf of local  # 1433 and affected unit members covered by the Labor Agreement between the Union and the Company

     

ON BEHALF OF Laidlaw Transit Services, Inc.

Michael E. Heston, Esq.
Capehart & Scatchard, P.A.
Laurel Corporate Center
8000 Midlantic Drive, Suite 300
Mount Laurel, NJ 08054

Peter A. Briggs
National Manager Human Resources
Laidlaw Transit Services, Inc.
30 South Raritan Street
Denver, CO. 80223


 

ISSUE

The parties did not submit a joint stipulation of the issue.
            The Union states that  those Operators hired by Laidlaw Transit Services Inc. in the year 1999 were not maintained  at the top wage rate at the ratification of the Collective Bargaining Agreement  (see Union closing Brief April 11, 2005)
            The Company frames the issue thusly:
            “Whether Laidlaw’s administration of the wage provisions of the CBA, with respect to fourteen individual employees, violated the contract”
            “If yes, what shall the remedy be?” (Company closing brief April 15, 2005)
             The Arbitrator frames the issues to be determined thusly:
            Did the Company violate Article 40, Operator’s Wage Rates, of the CBA, by limiting application of the top wage rate to those Operators hired on or prior to January 1, 1999? If yes, what shall the remedy be? Did the Company violate Article 40, Operator’s Wage Rates, of the CBA by not applying the top wage rate to all Operators with a hire date of 1999?  If yes, what shall the remedy be?

RELEVANT CONTRACT LANGUAGE

 Article 11 Grievance Procedure  
Section 2
“A ‘Grievance’,  as is used in this Agreement, means a claim by an employee that the terms of this Agreement have been violated, or that a dispute exists concerning the work rules or proper application or interpretation of this agreement.”
Section 3, Sub-sections A and B.
Section 3 “No grievance shall be entertained or considered unless it is presented in writing to the Operations Manager within fifteen (15) days (excluding Saturdays, Sundays, and holidays) after any controversy arises involving the interpretation or application of the terms of this agreement, or within seven (7) days (excluding Saturdays, Sundays and holidays) after the suspension or discharge of any employee for just cause”.
            A.  “The Company shall accept all grievances presented by a Union official in a timely manner.”
            B. “The grievance may be accepted by the Operations Manager, or his/her designee.”
Section 5 – (In pertinent part)
“The decision of the impartial arbitrator shall become final and binding on the parties of this Agreement when delivered to them in writing. The arbitrator shall have no power to add to, subtract from, ignore or modify any of the terms of this Agreement.”
Article 40 Operators Wage Rates  
Section 1  
“The straight-time base hourly wage rate for Operators shall be as follows:

Year

1/4/04

7/1/04

7/1/05

7/1/06

7/1/07

Start

$10.40

Minimum

1.5%

Minimum

1.5%

Minimum

1.5%

Minimum

1.5%

After 1 year

$11.50

 

 

 

 

After 2 years

$12.60

 

 

 

 

After 3 years

$13.70

 

 

 

 

After 4 years

$14.80

 

 

 

 

After 5 years

$16.00

 

 

 

 

           

Effective the start of the first pay period on or after 7-1-04 and each year thereafter on each July 1st, the above wage scale will be adjusted in accordance with the net change in the Western Urban Consumer Price Index for the period March to March each year with the maximum adjustment being in each respective year as follows:
7-1-04  -  2.5%
7-1-05   -  2.5%
7-1-06   -  2.5%
7-1-07  -  2.5%
In each of the above years 2004, 2005, 2006, and 2007 the minimum increase will be 1.5%.
The training rate is established at $7.00 per hour effective 1-4-04.
Wage rate changes will be effective on each Operator’s employment anniversary date.
Effective as soon as possible and subject to ratification on this settlement offer, the Company will pay to each employee who is on its payroll as of July 1, 2003, a one-time bonus of a net $300.00, except that employees who will be at top wage rate as of 1-1-04 will be paid a one-time bonus of a net $400.00. Employees hired after July 1, 2003 will receive a one-time net bonus of $200.00. In all cases to be eligible to receive the bonus, the employee must be currently employed as of the date of payment.” 
Article 41 Additional Agreements  
Section 1:
“No provision or term of this agreement may be amended, modified, changed, altered, and waived. Nor shall any condition be imposed on any provision of this contract except by written documentation, and ratified by the membership of the Union and signed by the parties hereto.”
Section 2: 
“Any of the provisions of this contract may be re-negotiated at anytime if mutually agreed upon by both parties”.  (JT. EX. 1).

FACTUAL BACKGROUND

             The Company contracts to provide transportation service in the Phoenix Metropolitan region. On May 28, 2003, the parties entered into negotiations to arrive at a successor Labor Agreement. These negotiations progressed for several months and resulted in the tentative agreement of October 30, 2003. ATU Local #1433 membership, in balloting conducted on November 5, and 6, 2003, rejected the proposed tentative agreement because a seven-step salary schedule would result in  lack of satisfactory progression on the wage scale.  Negotiations were resumed with the primary focus being the Union’s rejection of a seven-step wage scale.  As a result of negotiations, the Company   modified its proposal to establish a seven-step wage scale and agreed to a six-step wage scale. In addition, the Company would pay a bonus to all bargaining unit members, employed as of July 1, 2003. The December 12, 2003 tentative agreement was submitted to the Union membership for ratification and it was subsequently ratified on December 18, 2003.
             An integral part of the December 12, 2003 agreement is the establishment of one-time net bonus. The amount of the bonus an individual bargaining unit member is eligible to receive is contingent on one’s hire date on or before July 1, 2003. If before July 1, 2003, the net amount of the bonus is three hundred dollars  ($300.00). If hired after July 1, 2003 the net amount of two hundred ($200.00) is to be paid. The parties negotiated an exception to the July 1, 2003 eligibility date to accommodate those bargaining unit members who reached the top straight-time hourly wage rate of $15.03 per hour, in effect on January 1, 2004. Those individuals would be paid a net one-time bonus of four hundred dollars ($400.00), but limited to those Operators with a hire date prior to, or on December 27, 1999. At the hearing, both the Union and the Company stipulated, that the bonus payment is not in controversy and it has been paid in   accordance with the terms of the Labor Agreement.  The substantive issue of the instant arbitration is whether or not the Company is contractually bound to pay all of those Operators who were at the top wage rate of $15.03 pr/ hr on January 1, 2004, the top wage rate of $16.00 pr/hr that went into effect on January 4, 2004.

POSITION OF ATU LOCAL # 1433
ON BEHALF OF ITSELF AND ALL LAIDLAW OPERATORS WITH A SENIORITY DATE OF HIRE JANUARY 1, 1999 THROUGH DECEMBER 31, 1999

             The Union argues that the Company did not move all eligible Operators to the top step of the newly negotiated straight-time base hourly wage scale. Prior to the new wage rates that went into effect on January 4, 2004, the top straight-time hourly wage rate was $ 15.03 per hr.  The Union contends those bargaining unit members who were compensated at the top straight-time hourly wage rate prior to January 4, 2004 are to be paid the negotiated top wage rate of $16.00 per hr. Those individual Operators are identified by their hire date which corresponds to slots one (1) thru thirty-seven (37). (U.EX. 5).  
             When the Company implemented the negotiated wage increase for Operators ranked in slots one thru thirty-seven, the Company failed to apply the proper wage increase to Operators in slots twenty-five (25) thru thirty-seven (37). Rather than placing all Operators in slots one thru thirty-seven at the top wage rate of $16.00 per hr as of January 4, 2004, the Company placed only those Operators in slots one (1) thru twenty-four (24). In order for the Company to be in compliance with the terms and conditions of the Labor Agreement all Operators in slots one (1) thru thirty-seven (37) must be paid at the top straight-time base hourly wage rate of $16.00 per hr. Assignment of any wage rate other than $16.00 per hr to Operators in slots one (1) thru thirty-seven (37) is a   violation of the intent of the Labor Agreement. In the past all Operators at the top straight-time hourly wage rate have been compensated at the same hourly wage rate. It was never the intent of, nor was it the bargaining strategy of the Union to create a bifurcated wage rate for Operators who have a hire date on or before December 27, 1999.
             The remedy sought by the Union is for all Operators with a hire date of February 15, 1999 thru December 27, 1999, be placed on the top straight-time hourly wage, retroactive to January 4, 2004. 

POSITION OF LAIDLAW TRANSIT SERVICES, INC.

             The Company argues that at all times it has complied with the terms and conditions of the Labor Agreement, and has administered the wage scale as required.  Article 40 of the Labor Agreement specifies the hourly rate to be paid, and the required years of service needed in order to advance and progress thru the six step schedule. Step advancement on the six-step schedule is a function of the individual’s employment anniversary date. In the instant matter, the Company agreed to advance Operators in hire slots one (1) thru twenty-four (24) to the top straight time rate effective January 4, 2004. Those Operators that received the top straight-time wage rate had hire dates of July 6, 1987 thru January 4, 1999. Because the new wage rates became effective on January 4, 2004, it excluded bargaining unit members who did not have an employment anniversary date on or prior to the effective date of the new wage scale.
             With the exception of Operators in hire slots one (1) thru twenty-four (24), an individual’s progression on the salary schedule is dependent on one’s employment anniversary date. The Labor Agreement was never amended or modified to dispense with this requirement. Therefore, Operators with a hire date after January 4, 2004, will progress through the salary steps based on their employment anniversary dates.  
             The language of Article 40, Operators Wage Rates, is clear and suffers no ambiguities. In consideration of this matter the arbitrator should give ordinary meaning to the language the parties negotiated. The Company followed and complied with the plain language and meaning of the Labor Agreement and did so in its administration of Article 40 Operators Wage Rates.  There is no contractual obligation to advance Operators hired   on or after January 5, 2004 to the top straight-time wage rate in effect on January 4, 2004 since at that time these Operators had not completed the required 5 years service.
             The Company requests denial of the grievance in its entirety.

DISCUSSION

              The Company and the Union engaged in bargaining to arrive at a Successor Labor Agreement and did so on or about December 12, 2003. At the hearing, both the Union and Company offered testimony   that a major focus of their bargaining discussions revolved around the issue of progression on the wage scale. The parties exchanged various proposals and continued to do so after the Union membership rejected the tentative agreement of October 30, 2003. When the Union membership declined to ratify the tentative agreement, the Union bargaining committee advised the Company of the reasons for the rejection and shortly thereafter negotiations resumed. During the renewed negotiations the Union’s bargaining committees explained  that the   reason for the rejection was the membership displeasure with wage scale progression. Faced with the Union membership’s clear expression as to why it rejected the proposed agreement,   the parties’ respective negotiating committees renewed their efforts to find  an acceptable solution. Each side approached potential resolution of the wage progression issue from different perspectives; however, there was mutual recognition that a successful resolution of this issue was a critical element to the Union’s membership acceptance and ratification of a Successor Labor Agreement. The negotiations were successful and a new tentative agreement was ratified on December 18, 2003.  
             An analysis of Union Ex’s 1, 2 3 and the final agreed contract language   of Article 40, Operators Wage Scale (JT. EX 1) is necessary to understand    the distinct interpretation of the Article held by the Union and the Company   which  constitutes the underlying  essence of this grievance.  
             Bargaining Unit member’s progression on the wage scale is addressed in the Phoenix Company Economic Proposal Co-E 2 of October 9, 2003 (U. EX. 1). In this proposal, a seven-step straight-time base hourly wage rate with an effective date of July 1, 2003 is advanced. Each successor increase is effective on or after the   first pay period on July 1st of each succeeding contact year, with the final adjustment on July 1, 2007. Vertical movement on the proposed seven-step wage scale is dependent upon an individual Operator’s employment anniversary date.  
             Richard Johnson, Vice-President of ATU Local 1433, testified that a major objective of the Union’s bargaining strategy was to improve the rate of progression on the wage scale, and evidence of this was found in (U.EX.1) In particular, the proposal provided for current employees who were presently at the 3rd step of the straight-time base hourly wage rate to skip the 4th step and directly advance to the 5th step. Similarly situated Operators who were at   the 4th step of the wage scale would skip the 5th step and be placed on the 6th step.  However, it is the individual bargaining unit member’s employment anniversary date that is determinative of the exact date at which an individual would skip a step and move vertically on the wage scale. In the framework of Article 40, Operators Wage Rates, the parties preserved the tenet that vertical movement on the wage scale is a function of the individual’s anniversary employment date.   
             Phoenix-Company Offer for Settlement, of October 30, 2003,  (U. EX2) modified the anniversary employment date requirement to skip from the 3rd to the 5th step and from the 4th to the 6th step, on the straight-time base hourly wage scale.  It appears the anniversary employment date used to determine eligibility to skip a step was replaced and substituted by a fixed hire date of before July 1, 2003. Utilization of the fixed date of July 1, 2003, when applied to the hire date roster (U. EX 5), provided eligibility to skip a step to Operators with a hire date prior to June 26, 2003.   The remainder of the proposal preserved vertical movement to an Operator’s anniversary employment date. Further, the proposed tentative agreement carried forward the Company’s proposal for a seven-step wage scale. This tentative agreement was rejected by the Union’s membership.  
             Phoenix-Company Offer For Settlement, of December 12, 2003, (U EX. 3), was ratified by the Union membership on or about December 18, 2003. Undisputed testimony presented indicated that the parties paid particular attention to crafting an agreement to deal with the issue of wage scale progression.  
             Peter Briggs, National Human Resource Manager, testified that during these negotiations he conveyed the Company’s concern to limit the economic impact of any revised agreement. These financial limitations were communicated to the Union and both parties continued to work toward a mutually acceptable agreement.  The final agreement incorporated wage increases with an initial implementation date of January 4, 2004. This date was deliberately chosen to limit the number of Operators at the top wage rate who would be immediately eligible to advance to the new rate of $16.00 pr hr. The January 4, 2004 effective date was chosen with purpose because it reduced the immediate    financial impact of the agreement on the Company. Vertical movement on the Operator’s Wage Scale for those not eligible for immediate advancement would occur on their employment anniversary dates.   
              Witnesses who testified on behalf of the Union and Company did so truthfully and without reservations. This award does not turn on the issue of creditability even though some of the testimony offered was diametrically opposed. This opposition in testimony stems from individuals who subscribe to differing interpretations of the Article and hold enhanced expectations of what Article 40 is to achieve.  
             Article 40 does not suffer from a lack of clarity. Therefore, its language and wage scale chart is to be given its plain meaning. The history of the bargaining illustrates the ability and skill of the negotiators to establish different effective dates for various economic improvements. Movement of these effective dates significantly apportions the economic offer.   Article 40 in its final adopted forum has specific effective dates governing vertical movement that are independent of the fixed general wage increases. The wage scale chart has clearly established calendar dates regulating eligibility for vertical movement and the general wage increases.  The agreement provides for the general wage rates to be effective on January 4, 2004, but does not modify or alter the years of service required to advance vertically on the scale. Simply stated, vertical movement is dependent on years of service an employee had with the Company on January 4, 2004. This, in turn, is determinative of the employee’s placement on the wage scale. Operators whose employment hire date did not qualify them for vertical advancement on January 4, 2004, would advance to the next step on their employment anniversary date. The evidence indicates the parties went to great care to preserve the concept of vertical movement on the wage scale effective on an employee’s anniversary date.  Had the parties desired to negotiate different effective dates for wage increases and vertical step movement, they certainly could have done so.   
             Although the payment and amount of the bonus is not in dispute, the parties’   allocation of it is an example of the parties’ ability to utilize different effective dates in a multi-phased economic package.  The amount of the one-time bonus is contingent on an individual Operator’s hire date. The amount to be paid   has three distinct elements which are the proximity of an individual’s hire date being prior to, or after July 1, 2003, and if the Operator was at the top wage rate in effect on January 1, 2004.  
             If the bargaining committees intended to extend the top wage rate of $16.00 pr hr to all Operators who had an employment date of 1999, they could have   accomplished it by establishing the effective date of the general  wage increase  at January 1, 2004, rather than January 4, 2004. It is apparent that  through the negotiating processes the parties separated the effective dates of the general wage increase from the January 1, 2004, effective date of the bonus. With the establishment of the general wage increase effective  January 4, 2004, an Operator must have completed five years of service to move to the top wage rate of $16.00 per hr.

FINDINGS AND CONCLUSIONS

             1)  The Company did not violate Article 40, Operator Wage Rates, when it did not apply the top wage rate to Operators hired on or after February 15, 1999.  
             2)   The Company did not violate Article 40, Operators Wage Scale, when it did not, on January 4, 2004, apply the top wage of  $16.00 per hr to Operators with a hire date of February 15, thru December 27, 1999. The Operators in question are identified in  (U EX 5)  by rankings twenty-five  (25)  thru thirty seven (37).  
             3) The Company properly administered the salary schedule by advancing Operators who had been  five years in service to the top step on January 4, 2004 , and advancing those who did not have five years of service  to the next step on the schedule based on their respective employment anniversary dates.

AWARD

            The grievance is denied.           

            ______________________
                    John F. Wormuth                 May 10, 2005
                        Arbitrator


[1] Meritor Savings Bank vs. Vinson, 477 U.S. 57

[2] Grief Bros. Cooperage Corp..42 BNA Labor Arbitration 555 (Daugherty, 1964).

[3] GTE California, 103 LA 343

[4] Simpkins Industries; United Parcel Service, 104 LA 417, 422

 

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