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Labor Relations Advisor, October 2014

October 31, 2014

47 FedEx Freight Drivers Vote in Favor of Teamster Representation

The International Brotherhood of Teamsters (IBT) announced on October 14th that FedEx Freight drivers in Croydon, Pa. voted 26 to 18 in favor of IBT representation. This is the first IBT victory at a FedEx Freight facility. The 47 drivers covered will become part of Local 107. 

The company, however, indicated in its own press release that it may appeal to the National Labor Relations Board. The company believes its “open and thriving work environment provides a more flexible, team-oriented and customer-focused work model than the union offers.”

The victory in Croydon comes after the IBT lost a representation vote at a FedEx Freight facility in Cinnaminson, N.J. on October 10. The election in New Jersey would have covered over 100 employees.

According to the union, various additional campaigns are under way at FedEx Freight.

The union claims their campaigns have already “paid off.” According to the union, FedEx announced an 80-cent-per-hour increase and terminated its driver scorecard program shortly after Local 107 filed for a representation election. The union also claims trucking company, Con-way, increased pay and modified other provisions during that same time in reaction to the filing for representation at FedEx Freight.

IBT General President, Jim Hoffa, said “Thousands of freight workers at Fed Ed Freight and Con-way are turning to the Teamsters union.”

Hoffa’s reference to Con-way likely refers to the recent IBT victory to organize 113 truckers and dock workers at Con-way Freight in Laredo, Texas.

Textron IAM Members Ratify an Agreement Merging Cessna and Beechcraft Employees

International Association of Machinists and Aerospace Workers (IAM) at Textron Aviation ratified a six-year agreement covering both Cessna Aircraft and Beechcraft Corp employees. According to the union announcement, the agreement covers about 4,100 employees and was voted in by a margin of 73 percent.

Textron acquired Beechcraft in March 2014 for about $1.4 billion two years after it filed for Chapter 11 bankruptcy in 2012.  Textron has owned Cessna Aircraft since 1992.

The parties negotiated for a little over a month to merge the two contracts. On October 15th, Textron and IAM sent a joint letter to the members of the two IAM locals. The letter said that the company’s offer “commits to growing jobs in Wichita, preserves the importance of seniority for both workforces and provides improved pay and competitive benefits.”

The new collective bargaining agreement (CBA) provides for a 6.5 percent general wage increase over the term of the agreement as well as two lump sums, each for 1.5 percent in 2016 and 2018. In addition, the CBA provides for a new performance-based bonus plan, annual cost-of living adjustments, and an increase in time off.

The IAM’s summary of the agreement is available here.

USW and Rock-Tenn Achieve Ratification of First-Ever Master Agreement

United Steel Workers (USW) announced on October 10, 2014 that members of 61 locals ratified a first-ever national master agreement with Rock-Tenn by “a large margin.” The agreement will cover about 6,000 workers.

While the agreement sets significant contract items such as wages, health care, and vacation, the individual locals may still bargain local issues individually.

USW International President Leo W. Gerard said, “Our members in the paper sector, one of our union’s largest, have made significant progress in developing a more efficient and effective process to negotiate improved contracts at Rock-Tenn and throughout the industry.”

The six-year agreement provides 2.0 percent wage increases in the first three years, 2.5 percent increases in years 4 and 5, and another 2.0 percent increase in the last year of the contract.

The current PPO health care plans will be replaced by a union-proposed Consumer Choice Plan. Premiums will decrease while deductibles will increase according to the union’s summary.

The company will also seed a Health Saving Account (HSA) in the first year of the agreement with $500 for a single employee and $1,000 for families. Rock-Tenn will make this seed contribution during each year of the agreement. In addition, all employees will start out with $1,000/$2,000 in tax-free money in their HSAs.

The agreement was reached in Pittsburgh, where Rock-Tenn is headquartered, during a session in late August attended by Rock-Tenn’s company officials and more than 150 USW members. More specifically, the agreement was reached around 3:30 in the morning of August 28th, according to the union.

For additional details, visit Local 237’s summary page here.

NTSB Reports Engineer of Fatal Metro-North Crash in December 2013 had Sleep Apnea

On December 1, 2013, a Metro-North train derailed in the Bronx killing four people and injuring 61 others. According to a report released by the National Transportation Safety Board on Oct. 28, 2014, several factors contributed to the accident including the engineer’s sleep apnea.

The probable cause of the accident was the engineer’s “noncompliance with the 30-mph speed restriction because he had fallen asleep...” The train derailed when it hit a curve at 82-mph.

After the accident, the engineer, William Rockefeller, told investigators he remembered feeling “dazed” or “hypnotized” just before the derailment. The NTSB report reviews Rockefeller’s medical condition in some detail. Before the accident, he had passed all required physical examinations but had been diagnosed with low testosterone and later hypothyroidism. Rockefeller was also medically obese and had complained of fatigue.

After the accident, results from a sleep study indicated Rockefeller had severe obstructive sleep apnea (OSA). Neither Metro-North nor the Federal Railroad Administration (FRA) had any regulations in place requiring safety screenings for sleep disorders. According to Bloomberg BNA, the NTSB has actually recommended the FRA implement sleep –apnea screenings in the past.

Another contributing factor to the accident was the engineer’s recent switch to a new work cycle which shifted his wake/sleep schedule by about 12 hours. The accident occurred only two weeks after this change in work cycle.

According to the report, Metro-North has developed and implemented a train-speed enforcement program involving speed checks and increased reviews of event-recorder data since the incident. In March of 2014, the FRA issued an in-depth safety assessment of Metro-North operations called Operation Deep Dive, Metro-North Commuter Railroad Safety Assessment. The assessment contained over a dozen recommendations for improving safety.

In February, 2014, the NTSB issued its own recommendations such as the installation of permanent speed restriction signs and inward- and outward-facing audio and image recorders.

According to Bloomberg BNA, NTSPB Chairman Christopher Hart and Senators Charles Schumer (d-N.Y.), Richard Blumenthal (d-Conn.) and Chris Murphy (D-Conn.), are not pleased with the FRA. Hart has criticized the FRA for “failing to do its job” as regulator.

The full NTSB report is available here.

Southwest Airlines and IAM Reach a Tentative Agreement Covering Passenger Service and Reservation Agents

Two years after beginning negotiations, Southwest and the International Association of Machinists have reached a tentative agreement (TA) covering over 6,000 of the airline’s passenger service and reservation agents.

The four-year agreement provides general wage increases of 1.5 percent on date of signing and again in 2015, 2016 and 2017. In the last year of the contract, 2018, wages will increase by 2.0 percent. Employees at the top of scale, however, will receive cash bonuses of 1.5% in lieu of wage increases in 2015 and 2017. The top of scale base wage will increase from $26.88 per hour up to $28.24.

All employees will receive ratification bonuses based on their seniority. For full-time and part-time employees respectively, 0-5 year employees will receive $1,200/$600, 6-10 year employees will receive $1,400/$700, and 11+ year employees will receive $1,740/$870.

The agreement also provides a profitability bonus where employees will receive a 0.5 percent payout of their annual earnings if a 15 percent Return on Invested Capital (ROIC) is reached by the company. A productivity bonus is also provided where employees will receive up to $1,000 bonus based on attendance record.

Southwest will maintain their 401(K) plan and 9.3 percent company match.

In a statement, Mike van de Ven, Southwest’s executive vice president and COO, said the contract “incorporates rewards and incentives for our hard-working customer service agents and customer representatives, while remaining mindful of Southwest’s low cost structure and long-term success.”

The IAM’s negotiating committee unanimously recommends ratification of the TA. A date for voting has not yet been set.

The union’s summary of the agreement can be found here.