Harris Rules Letter

Dear Brothers and Sisters:


On May 8, 2003, Arbitrator Robert Harris ruled that TCU was correct in its interpretation of the way retroactivity should be calculated for Carmen and Clerks under the terms of the National Contract Arbitration decision, and that certain Clerical BNSF employees on wage continuation or reserve boards were not liable for retroactive health insurance contributions since they did not receive the wage increases of the Award.

On the retroactivity question, TCU took the position that the Award should be applied as written, with one increase on June 30, 2002 and the next on July 1, 2002. The carriers had made both increases effective July 1, 2002 when they issued the retroactive checks.

Harris ruled for TCU, stating:

“… there were to be two retroactive wage payments. The first was to be a 2.5% wage increase calculated to be effective as of June 30, 2002 and made retroactive to that date, and thereafter, on the following day, a second calculation was to be made increasing the wage rate by 3.5% on July 1, 2002, with that increase also to be retroactive to its effective date. The 3.5% increase was to be calculated based upon the effective wage rate at the close of business on June 30, 2002, which would include the 2.5% increase granted on that day.”

Under this ruling, the TCU retroactivity guide was correct as written. The carriers will owe one day’s retroactive payment – a 2.5% increase for hours paid on June 30, 2002. We have written the NCCC to ascertain when and how the payment will be made.

Although the amounts will be small, TCU believed the principle that the carrier could not unilaterally change any terms of the award was important to uphold.

The second dispute involved a group of employees receiving wage protection pursuant to the merger agreement on BNSF. Under the terms of that merger implementing agreement, employees would not receive future wage increases, but also would not be liable for future health insurance cost sharing. BNSF, in an especially vindictive and greedy effort, argued that the exemption from cost sharing only applied to offsets, not the far greater health insurance contributions mandated by the Award. And they insisted that these employees not only were liable for prospective health insurance contributions, but for retroactive payments back to July 1, 2001.

TCU maintained that Harris’ Award did not contemplate retroactive employee health insurance contributions in the absence of wage increases. In the May 8 interpretation, Harris agreed with TCU and forbade BNSF from going after retroactive contributions. Harris wrote,

“The award sets forth increases in wage rates, establishes future COLAs and also sets forth, for the first time, contributions which are to be made by individual employees to the ever-increasing costs of their health care insurance. In attempting to finally resolve the differences between the parties, the award attempted both to meet the needs of the carriers to have part of the increase in health care costs paid by the employees (for economic reasons and to make the employees aware of such increases so as to potentially lower future increases) and to ensure that the cost increase passed on to employees would not reduce their present wages. The balance which was attempted to be struck was to make the cost-sharing “cost neutral” to the employees.

… the assumption was made that all employees would receive the wages, including retroactive wages, which were stated in the Award. Were the record evidence to have shown that a group of employees would not receive wage increases the Award would have exempted those employees from the requirement to make contributory payments for their health and welfare benefits for such periods where they did not receive such wage increases.”

Under the terms of the interpretation, Harris only had jurisdiction on the issue of retroactive contributions. The issue of whether BNSF employees on wage continuation or reserve board owe prospective contributions is in the process of being submitted to expedited arbitration.

In solidarity,

Robert A. Scardelletti
International President


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