- The Washington Times - Monday, October 30, 2000

Most Americans would be surprised to learn that a bus driver for their local transit agency may earn up to twice as much as a teacher They would be shocked to find that a new interpretation of a 36-year-old federal labor protection statute virtually guarantees that bus driver a job for life.

When the Federal Transit Act was passed in 1964, governments around the country were taking over failing private transit companies. Since the right to collective bargaining was relatively rare in the public sector at that time, section 13(c) of the Act contained provisions designed to ensure that federal funding of mass transit did not negatively impact workers transitioning from private to public employment.

Ironically, that same law now restrains public transit agencies from contracting out any portion of their operations to private companies. It guarantees displaced transit workers up to six years of full pay and benefits, and a transit agency's failure to provide the required protections results in loss of federal funding.

After attempts by several transit agencies to save money and improve service were derailed by the Department of Labor (DOL), the Senate Banking Committee has begun hearings, expected to continue into next year, on the section 13(c) enforcement process.

The hearings have largely focused on a case in Boston. At the urging of the Federal Transit Administration, which requires its grantees to engage in competitive procurement, the Massachusetts Bay Transportation Authority put the cleaning and maintenance of its commuter rail trains out to bid. Amtrak has been the contractor since 1987. Bay State Transit Services, a joint venture between Herzog Transit Services and Boise Locomotive, bid $175 million and had the highest-rated proposal. Amtrak, the federally subsidized railroad, bid $291 million and had the lowest-rated proposal. Not surprisingly, Bay State was awarded the contract.

Aware of its responsibilities under 13(c), the MBTA included in its request for proposals a requirement that the contractor hire as many employees as possible from the pool of current Amtrak workers to union jobs with comparable wages and benefits. Because Amtrak's Boston service employs more workers per train than any commuter rail in North America, the new contractor would not need all the current employees. The MBTA also identified 55 comparable jobs within the Authority that could be filled by the Amtrak workers and stood ready to pay the full six-year severance package to remaining displaced workers.

Still, the Transport Workers Union of America filed a complaint with DOL claiming the MBTA was in violation of section 13(c). The Labor Department must certify that transit agencies are in compliance with 13(c) before the Transportation Department can disburse grant money. DOL agreed with the union and froze the MBTA's federal funding. Unable to hold out long enough without federal funding to challenge the action in court, the MBTA was forced to sign a three-year extension of its contract with Amtrak the bidder that provided the lowest quality at the highest price.

An analysis of the Boston case reveals a bad law run amok. In 1976, the MBTA acquired the rights of way for its commuter rail service from a private railroad. The Labor Department therefore determined the Boston case to be an "acquisition" as opposed to a "merger." Who cares about such definitional hairsplitting? The Labor Department does. Once acquisition status is established, employees are guaranteed maximum protection in perpetuity.

Given this acquisition status, the Labor Department determined that guaranteeing employees union jobs at comparable wages was not enough to satisfy 13(c). Nor would it have been enough to recognize the bargaining unit already in place. According to DOL, Bay State Transit Services would be bound by Amtrak's collective bargaining agreement, meaning it would have had to hire all the current employees regardless of need. This new interpretation institutionalizes featherbedding in Amtrak's case, there are nine classifications of employees to clean and maintain trains and no multitasking is allowed and makes it impossible for transit agencies seeking greater efficiency to do anything more than change managers.

But the Labor Department was not through. It went on to rule that the MBTA was not solely responsible for 13(c) protections and that Bay State Transit should have included potential severance costs in its bid. Making private contractors responsible for the costs associated with satisfying the Labor Department's ever-rising standards for 13(c) compliance achieves the ultimate goal of transit unions and the department: to make competitive bidding so onerous that it locks the status quo in place. It is difficult to disagree with the conclusion of Senate Banking Committee Chairman Phil Gramm, Texas Republican, that DOL is "a wholly owned subsidiary of the AFL-CIO."

And the Labor Department may not be alone. When Mr. Gramm sent Transportation Secretary Rodney Slater a series of questions on the topic, the response came not from Mr. Slater, but from the counsel to the mass transit unions.

In fact, it seems the 13(c) process is suddenly riddled with politics. For the past several years, the Labor Department has upheld about one-third of union challenges to 13(c) certification. In this election year, they have upheld virtually every one.

Despite the unparalleled labor protections transit workers enjoy, Sen. John Kerry, Massachusetts Democrat, has throughout the Banking Committee's examination of the 13(c) process fallen back on the old alarmist claim that the MBTA and Bay State were trying to "break the unions." Mr. Kerry has it backward: The unions are breaking us.

Charles D. Chieppo directs the Center for Restructuring Government at Pioneer Institute in Boston.

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