National Contract Arbitration Decision Issued


January 24, 2003

Dear Sisters and Brothers:

This is to advise that Robert Harris has issued his decision in our arbitration case covering wages and health and welfare issues for the Clerical and Carmen National Agreements.

The decision is as follows:

October 1, 2001: Roll in $.27 Harris COLA.
June 30, 2002: 2.5% General Wage Increase; Harris COLA terminates.
July 1, 2002: 3.5% General Wage Increase.
July 1, 2003: 3.0% General Wage Increase.
July 1, 2004: 3.25% General Wage Increase.
Health & Welfare  
July 1, 2001 to June 30, 2002:

$33.39 per month.

July 1, 2002 to June 30, 2003:

$81.18 per month.

July 1, 2003 to June 30, 2004: $79.74 per month. 
Effective July 1, 2004: 60% of BMWE cost-sharing, capped at $100 per month.
Effective July 1, 2005 and every 6 months thereafter until a new contract is reached: Harris COLAs will resume, except that unlike in the past, all of the COLA amount payable will be permanently rolled into basic wage rates without offset. In lieu of having the cents-per-hour COLA reduced by a health and welfare offset, the monthly equivalent of up to 50% of the hourly COLA amount can be added to the 2004 monthly cost-sharing payment tied to increases in the cost of the health and welfare plan.

Employee health and welfare contributions will be on a pre-tax basis.

Prescription drug co-pays will be increased to the levels in the BMWE agreement, as follows: Drug Card Program: Generic – $5.00; Brand Name – $10.00. Mail Order Program: Generic – $10.00; Brand Name – $15.00.

Employees who have medical coverage through their spouse will have the option of opting out of the Railroad Plan on an annual basis, and will receive $1,200 if they elect to do so. If the spouse at any time loses coverage, the employee will again be covered under the Railroad Plan.

Comprehensive Health Care Benefit (CHCB) coinsurance for employees who live in managed care areas will be reduced from 85% to 75%.

The managed care out-of-network deductible will be increased to $200/person, $600/family (maximum).

Six plan benefit improvements were added: CHCB amended to include one routine physical exam (including diagnostic testing) each calendar year, payable at 100% up to $150, and 75% of the excess. Add routine childhood immunizations to CHCB. Eliminate Managed Medical Care Program (MMCP) co-pays for allergy shots. MMCP will continue to require a co-payment for the first visit to an obstetrician or gynecologist for pregnancy, but not for subsequent visits during the same pregnancy. Add coverage for phenylketonurial blood tests under CHCB and MMCP when given to infants under the age of one in a hospital or on an out-patient basis. Add speech therapy under CHCB and MMCP when given to children under age 3 as part of treatment for infantile autism, development delay, cerebral palsy, hearing impairment or major congenital anomalies that affect speech.

Off-track vehicle insurance was improved.

The Carmen Supplemental Sickness plan was improved.

The Carmen Journeymen Seniority Date was standardized.

With respect to each of the above two Carmen specific issues, Carmen Division General President Richard Johnson will address them in a separate letter to the Carmen Representatives. Click here to view the letter.

On wages, the arbitrator came in below TCU’s proposal, but substantially higher than the carriers’ proposal. On health and welfare, the arbitrator adopted the carriers’ proposal almost verbatim, except that he capped payments beginning July 1, 2004 at $100 per month where the company proposed payments of approximately $135.

The effect of the wage decision is as follows. Assume an employee has a wage rate of $18.50 on December 31, 2000. On January 1, 2001, the employee received a .27 cent Harris COLA. On July 1, 2001, the employee received an additional .11 cent Harris COLA. Neither were rolled into wage rates. Under this award, on October 1, 2001, the .27 cents are formally rolled into the $18.50 wage rate, bringing the rate up to $18.77. However, the .11 cents are not rolled in. On January 1, 2002, the employee received an additional .10 cent Harris COLA. From this date through June 30, 2002, the employee was receiving $18.98 an hour, $18.50 in actual rate plus .48 cents in COLA. On June 30, 2002, the .21 cents in COLA that was not rolled in will discontinue. However, it will not be recovered for the period up to June 30, 2002. It will be recovered for the period after that date, July 1, 2002 through the date of the award. Also on June 30, 2002, the employee’s wage rate of $18.77 will be increased by 2.5%, raising it to $19.24. On the next day, July 1, 2002, the rate is increased by 3.5%, raising it to $19.91. On July 1, 2003, the rate is increased by 3%, raising it to $20.51. On July 1, 2004, the rate is increased by 3.25%, raising the final rate under the contract to $21.18. Over the life of the contract, the rate increase from $18.50 to $21.18 amounts to fourteen and a half percent.

According to the arbitrator, the retroactive wage increases are set at a level to pay for the retroactive health insurance premiums. Therefore, most employees will receive a small amount in retro pay, under $200. This will vary depending on how many hours the employee worked. We are presently working with the carriers on the formal contract language, which will ultimately be the Clerical and Carmen National Agreements. As soon as this is completed, we will send a complete contract to all local/district chairpersons and we will also post a copy on this website so that every member has access to it.

Overall, I am very disappointed in the Award. Clearly, TCU members are entitled to a higher raise. Also, I do not believe that TCU members should be required to make these health and welfare contributions. We presented a strong case for higher wages and dramatically lower contributions. We knew that in the face of the BMWE settlement which provides for even higher contributions and lower wages, we would wind up with some amount of employee contributions.

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