IN THE UNITED STATES DISTRICT COURY: . ,_, .:__'.
"'T5 ~ FOR THE DISTRICT OF COLUMB~A;- '_,': :,:'-\ :':) 5;
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, 600 Fifth Street, NW Washington, DC 200.01, Petitioner,
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LOCAL 2, OFFICE AND PROFESSIONAL EMPLOYEES INT'L UNION, AFL-CIO. 8555 16th St. #550 , Silver Spring, MD 20910 Respondent.
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PETITION TO VACATE ARBITRATION AWARD
Pursuant to 40 U.S.C.
S 18304(c), Washington
Metropolitan Area Transit Authority
("W11ATA" or "the Authority"), by and through counsel, petitions this Honorable Court for the entry of an Order vacating the general wage adjustments; the resulting pension benefit Increase, and the new subcontracting and pay band provisions granted by the Arbitration Award of three (3) member arbitration panel (the "Board") led by Neutral Chairman Kenneth E. Moffett, which issued on January 13, 2012. As grounds for this Petition, WMA TA states as follows:
Nature of this Case
This is an action to vacate the general wage adjustments, the resulting pension '
benefit increase, and the new subcontracting and pay bands provisions granted by an interest arbitration award (the "Award"), attached hereto as Exhibit A, issued in the matter ofWMATA
and Local 2, Office and Professional Employees International Union, AFL-CIO ("Loca12" or the "Union") on January 13,2012. The Award provides for increased wages, more favorable
pension benefits, and new subcontracting and pay bands arrangements, all of which actions are in violation of the applicable legal standards and without reasoned explanation or analysis, in contravention of the .National Capital Area Interest Arbitration Standards Act (the "Standards Act"), 40 U.S.C. § 18301 et seq. Moreover, the Board's actions were arbitrary and capricious and clearly exceeded its authority. The Parties 2. WMA TA is a regional instrumentality and agency of the State of Maryland, the""
District of Columbia, and the Commonwealth of Virginia that was created and is governed by the Washington Metropolitan Area Transit Compact, as amended, (the "Compact").' The purpose of
WMATA isto coordinate the operation of transit services within the Washington, D.C. metropolitan area. 3. Local 2, is affiliated with the Office and Professional Employees International
Union, AFL-CIO whose members are employed by the Authority. Jurisdiction" and Venue 4. The Standards Act, 40 U.S.C. § 18~04(c), gives a party the right to seek judicial
review of an arbitration award, including on the grounds that "the award is in violation of applicable law," "the arbitrator exceeded the arbitrator's powers;" "the decision by the arbitrator was arbitrary and capricious;" and "the arbitrator did not comply with the provisions of section 18303 of this title."
For legislation by Congress, see P.L. 89-774, 80 Sta. 1324 (1966); P.L. 92-34:9, 86 Stat. 464 (1972); P.L. 92-517,86 Stat. 999 (1972); P.L. 94-306, 90 Stat. 672 (1976); P.L. 100-285, 102 Stat. 82 (1988); P.L. 104-332,110 Stat. 3884 (1996); P.L. 105-151, 111 Stat. 2686 (1997). -21
. The Court has original jurisdiction over this action under § 81 of the WMATA
Compact (the "Compact"). codified at D.C. Code § 9-1107.10. 6. Venue in this Court is proper pursuant to the Compact and because the parties
have a substantial presence in this judicial district. Governing Legal Authorities 7. The Compact provides that WMA TA is "an instrumentality and agency of each of .
the signatories ... which shall be a body corporate and politic, and .;. shall have the powers and duties granted herein and such additional powers as may hereafter be conferred upon it pursuant to law;" Compact at § 4. 8. The general powers ofWMATA are enuriIerated in Section 12 of the Compact.
Those general powers include its authority to "create and abolish offices. employments and positions (other than those specifically provided for [in the Compact]) as it deems necessary for the purposes of the Authority ... [and] contract for or employ any professional services ... [and] [e]xercise ... all powers reasonably necessary or essential to the declared objects and purposes of this Title." Compact § 12(g), (i), (m). 9. The Compact provides that the Authority "shall deal with and enter into written
contracts with employees as defined in Section 152 of Title 29, United States Code, through accredited representatives of such-employees or representatives of any labor organization authorized to act for such employees concerning wages, salaries, hours, working conditions, and pension or retirement provisions." Compact at § 66 (b).
The Compact provides for arbitration of "any labor dispute involving the
Authority and such employees where collective bargaining does not result in agreement." Compact at § 66 (c). The Compact further provides that the term "labor dispute'tincludes: Any controversy concerning wages, salaries, hours, working conditions, or benefits including health and welfare, sick leave, insurance or pension or retirement provisions but not limited thereto, and including any controversy concerning any differences or questions that may arise between the parties including but not limited to the making or maintaining of collective bargaining agreements, the terms to be included in such. agreements, and the interpretation or application of such collective bargaining agreements and any grievance that may arise and questions concerning representation. Compact at § 66 (emphasis added). 11. The Standards Act, 40 U.S.C. § 18303(d), provides:
Written award. In resolving a dispute submitted to arbitration involving the employees of an interstate compact agency operating in the national capital area, the arbitrator shall issue a written award that demonstrates that all the factors set forth in subsections (b) and (c) [40 U.S.C. § 18303(b)-(c)] have been considered and applied .. Prerequisites. An award may grant an increase in pay rates or benefits (including insurance and pension benefits), or reduce hours of work, only if the arbitrator concludes that any costs to the agency do not adversely affect the public welfare.
(3) Substantial evidence. The arbitrator's conclusion regarding the public
. welfare must be supported by substantial evidence. (emphasis added). The term "public welfare" is defined in turn in subsection (a), 40 U.S.C. § 18303(a): (a) Definition. - In this section, the term "public welfare" includes, with respect to an arbitration under an interstate compact (1) the financial ability of the individual jurisdictions participating in the compact to pay for the costs of providing public transit services; and
(2) the average per capita tax burden, during the term of the collective bargaining agreement to which the arbitration relates, of the residents of the Washington metropolitan area, and the effect of an arbitration award rendered under that arbitration on the respective income or property tax. rates of the . jurisdictions that provide subsidy payments to the interstate compact agency established under the compact. (emphasis added). 12. provides: (c) Ability to finance salaries and benefits provide€l in award. - An arbitrator rendering an arbitration award involving the employees of an interstate compact agency operating in the national capital area may not, with respect to a collective bargaining agreement governing conditions of employment, provide for salaries and other benefits that exceed the ability of the interstate compact agency, or of any governmental jurisdiction that provides subsidy . payments or budgetary assistance to the interstate compact agency, to obtain .the necessary financial resources to pay for wage and benefit increases for employees of the interstate compact agency. 13. . Subsection (b), 40 U.S.C. § 18303(b), which is incorporated by reference into Subsection (c), 40 U.S.C. § 18303(c), also incorporated in Subsection (d)(1),
Subsection (d)(l), provides that an arbitrator rendering an arbitration award concerning WMATA employees "may not make a finding or a decision for inclusion in a collective bargaining agreement governing conditions of employment without considering" the following seven specific factors:
(1) The existing terms and conditions of employment of the employees in the
bargaining unit. (2) All available financial resources of the interstate compact agency. (3) The annual increase or decrease in consumer prices for goods and services as reflected in the most recent consumer price index of the Washington metropolitan area, published by the Bureau of Labor Statistics .... . -5-
(4) The wages, benefits, and terms and conditions of the employment of other employees who perform, in other jurisdictions in the Washington standard metropolitan statistical area, services similar to those in the bargainirig unit. (5) The special nature of the work performed by the employees in the bargaining unit, including any hazards or the relative ease of employment, physical requirements, educational qualifications, job training and skills, shift . assignments, and the demands placed upon the employees as compared to other employees of the interstate compact agency. (6) The interests and welfare of the employees in the bargaining unit, including (A) the overall compensation presently received by the employees, having regard not only for wage rates but also for wage for time not worked, including vacations, holidays, and other excused absences;
(B) all benefits received by the employees, including previous bonuses, insurance,
and pensions; and (C)the continuity and stability of employment.
(7) The public welfare.
Taken together, the components of Section 18303 establish explicit
procedural and substantive requirements that an arbitration award concerning the terms and conditions of employment covering employees of WMATA must meet. In particular, they explicitly require that any award that increases pay rates or benefits is dependent on the financial ability of WMA TA or the individual jurisdictions participating in the Compact to pay for those increases. This inquiry necessarily requires the arbitrator to take into account the state of the finances of WMA TA and the participating jurisdictions. 15. The Findings section of the statute, 40 U.S.C. § 18301, explicitly confirms the
conclusion that Congress intended to impose mandatory obligations on arbitrators rendering awards subject to the Standards Act. Among those obligations is the requirement that the
arbitrators must expressly determine that any wage or benefit increases awarded through arbitration could be financed by WMATA and the participating jurisdictions under prevailing economic conditions. Section 18301(a)(6) provides: (6) imposition of mandatory standards applicable to arbitrators resolving . arbitration disputes involving interstate compact agencies operating in the national capital area will ensure that wage increases are justified and do not exceed the ability of transit patrons and taxpayers to fund the increase; .... Section 18301(a)(4) further finds that higher operating costs for public transit in the area "cannot be offset by increasing costs to patrons, since this often discourages ridership and thus undermines the public interest in promoting the use of public transit[.]"
WMATA and the Union are parties to a collective bargaining agreement ("CBA")
which covers the period from July 1, 2004 through June 30, 2008.
The bargaining unit covered by the CBA atissue in this proceeding consists of
approximately 709 employees who collectively represent approximately 7% of.the Authority's total workforce. 18. On March 28, 2008, WMATA and the Union commenced negotiations over the
terms and conditions for a successor collective bargaining agreement. "WMA TA and the Union reached-impasse on July 8, 2008, over certain terms and conditions, including, but not limited to, wages, pensions, health benefits, subcontracting and other issues. 19. The impasse as to the terms and conditions that would be included in the Parties
successor collective bargaining agreement was submitted for interest arbitration in accordance with Section 66(c) of the Compact.
On or about August 25, 2009, in accordance with the procedure set forth in the
Compact, the parties established a Board of Arbitration, which consisted of Thomas R. Roth (Union Board Member), Robert G. Ames (WMATA Board Member), and Kenneth E. Moffett (Neutral Chairman). The parties exchanged final proposals on May 27,2010. WNIATA submitted substitute final proposals on July 13,2010 and October 26, 2010. 21. The Board of Arbitration held hearings on the merits in this matter on July 8, 9,
12, 13, 15, and 16; October 25,26, and 27; and November 8 and 9, 2010. 22. The record created from the hearings consists of more than 400 exhibits and over
2,386 pages of transcript. 23. On January 13,2012, the Board issued its Award. A copy of the Award is
attached hereto as Exhibit A and incorporated by reference. 24. The Board awarded aGeneral Wage Adjustment as follows: Effective July Effective July Effective July Effective July 1,2008 1,2009 1, 2010 1, 2011 2% lump sum paymeni** 3% general wage increase 3% general wage increase " 3% general wage increase
"**To receive the 2% lump sum payment as provided above, the employee must-have been on the employment rolls as of the date of this Award. The lump sum payment shall be based upon the total " straight-time hourly wage earnings between July 1, 2008 "and June 30, 2009. The lump sum payment shall also be payable on the "same basis to any employee who retired on or after July 1, 2008. Ex. Aat6. 25. In granting the general wage adjustments, the Award increases the future
retirement benefits of current employees hired prior to July 1. 1999 by increasing their "final average compensation" for benefit calculation purposes.
The general wage adjustments and resulting improved pension benefits granted by
the Award are invalid as a matter of law because the Board failed to follow the procedural and , substantive requirements of the Standards Act.
27. As to its award of general wage adjustments and resulting pension benefit'
increases, the Board fails to reach the required statutory conc1usionthat "any costs to the agency [resulting from the grant of an increase in pay rates or benefits] do not adversely affect the public welfarej.]" a term that includes, but is not limited solely to, "the financial ability of the individual jurisdictions ... to pay for the costs of providing public transit services].]" The Award
thus fails to comply with Section 18303(d)(2).
The Award further violates Section 18303(d)(3) in that it fails to identify
"substantial evidence" in the record supporting a: conclusion that "any costs to the agency" of increases in pay rates and pension benefits which it provides "do not adversely affect the public welfare."
29. With respect to the matter of subcontracting, the Board's Award deletes Article I,
Section 4(c) from the Parties' CBA, and replaces it with the following language: , be subcontracted by the Authority any outside source or agency which results in the lay-off, or reduction in salary or benefits, of a bargaining unit member. (2) Prior to subcontracting bargaining unit work, laid-off employees who are qualified to do the work shall be recalled. Qualifications will be established by applicable formal training, education, and background. , (3) Within 30 days of the date of this Award, a pennanentjoint Labor/Management Contracting Committee shall be established to review existing and proposed subcontracting practices at the Authority, with the goal of bringing work in-house on a costsaving or cost neutral basis. The committee shall have the authority to appoint ,subcommittees as necessary to review specific contracts andlor categories of work. , Ex. A at 25.
(1) Work which is normally and customarily performed by the bargaining unit shall not
The Board's decision with respect to subcontracting contravenes clear language in
the Compact which enumerates general powers granted the·authority. In particular, WMATA may: "create and abolish offices, employments and positions (other than those specifically provided for [in the Compact]) as it deems necessary for the purposes of the Authority ... [and] contract for or employ any professional services ... [and] [ejxercise ... all powers reasonably necessary or essential to the declared objects and purposes of this Title." Compact Section 12(g),
WMATA's statutorily conferred core managerial powers are not mandatory
subjects of bargaining as to which a labor dispute may arise pursuant to Compact Section 66 (c). By imposing on WMATA an obligation to: "recall" laid-off employees "prior to subcontracting . bargaining unit work" and!or in requiring WMATA to join with Loca12 in establishing a "permanent" joint Labor/Management Contracting Committee to review existing and proposed subcontracting practices at the Authority charged with ''the goal of bringing work in-bouse on a cost saving or cost neutral basis," the Board has exceeded the powers which it has been granted pursuant to the Compact (Article XIV, Section 66(c)) and the Standards Act. Ex. A. at 25-26. In the absence of a contractual "rights" arbitration decision holding that the subcontracting of specific functions was a violation of valid and applicable. subcontracting language, the decision whether or not to curtail the continued performance of specific work by subcontractors or to perform new work with subcontractors rather than "bringing work in-house," is a core entrepreneurial, management right of the Authority which is not subject to displacement or restriction through the Compact's "interest" arbitration procedure. The Board is without statutory authorization to compel WMATA to participate in any process that impinges upon its
statutorily conferred andlor inherent managerial rights to determine how it will perform its necessary operations. 32. Paragraph 3 of the Board's new language covering subcontracting is improper
because it is not supported by substantial evidence and in no event could be, because the Parties had not bargained over the terms of Paragraph 3 and the terms appeared in the Board's Award without the benefit of any record evidence or hearing on the merits. 33. The Board's determination that the joint Labor/Management Committee created
by Paragraph 3 of its Award with regard to subcontractors be "permanent," is beyond the power and authority of the Board. 34. Further, the Board's Award with regard to subcontracting fails to contain itself to
an outcome within the parameters of the Parties' respective final offers on the subject of subcontracting. In so doing, the Board exceeded the authority accorded to it by the Parties and the Compact. 35. The Board' s Award as to the.expansion of the salary schedules applicable to the
Loca12 Unit relied on a prior arbitration decision issued by Arbitrator Wolf who ruled that certain job classifications should be placed in the Loca12 Unit and that the employees performing those classifications - who are.compensated above the TA Grade-24 - should be ."Red Circled" at their higher salaries. The Board relied on the "Wolf Award" which it suggested demonstrated that the Local 2 bargaining unit work included work which was.appropriately compensated above Grade 24. Accordingly, the Board's Award added Grades L2TA-25 and L2TA-26.
The Board acted arbitrarily and capriciously and exceeded its jurisdiction in
adding Grades L2TA- 25 and L2TA-26 to VlMATA's salary schedule and by directing that incumbents subject to Paragraph 3 in the "Woif'Award be placed in the newly created Pay Grades. The placement of those individuals on the Local 2 salary schedule was not within the parameters of the Parties' final offers presented to the Board. 37. The Board's Award acknowledges that its findings and decision for inclusion in
the Parties' collective bargaining agreement governing conditions of employment were made based on "several 'other factors'" beyond those which are specified for consideration by the Standards Act. Ex. A, at 20. 38. The Board's Award fails to have reached its findings or decision based
exclusively upon consideration of the factors specified in 18303(b) and (c) as required by the Standards Act. 39. The Board's Award and Opinionevidences its failure to correctly interpret,
consider and apply the Standard Act's mandatoryand exclusive factors for making.a finding or a decision for inclusion in a collective bargaining agreement governing conditions of employment."
Grounds for Vacating the Arbitration Award COUNT ONE (40 U.S.C. § 18304)
The allegations of the foregoing paragraphs are incorporated as re-alleged herein. The general wage adjustments, the resulting pension benefit increases, and the
new subcontracting and pay band provisions granted by the Board's Award should be vacated because the Award violates applicable law, the Board exceeded its powers, the Award is -12-
arbitrary or capricious, and/or the arbitrator did not comply with the provisions of 40 U.S.C. § . 18303. (a) The Award fails to comply with the requirements for a final award specified in 40 U.S.C. § 18303(d). Specifically, the Award: (i) Does not demonstrate that all of the factors set forth in 40 U.S.C.
§§ 18303(b) and (c) have been exclusively considered and applied,
as required by Subsection 18303(d)(1);
Does not contain any conclusion that the costs to WMATA of an increase in wages andlor pension benefits would not adversely affect therpublic welfare," as required by Subsection 18303(d)(2); and
Does not demonstrate reliance on substantial evidence to support .the conclusion that the "public welfare" would not be adversely affected by th~ increase in wages.and/or pension benefits, as required by Subsection 18303(d)(3).
The Award does not indicate that the Board exclusively applied the . mandatory criteria identified in 40 U.s-~C.§ 18303(b), factors that, in particular, precluded the Board from considering "several 'other factors', including evidence regarding "internal patterns;" .
The Award provides for wage adjustments and pension benefit increases that exceed the funding ability ofWMATA and/or the governmental
jurisdictions that provide subsidy payments or budgetary assistance to WMATA, in violation of 40 U.S.C. § 183"03(c). (d) The Award is arbitrary and capricious because it fails tocomply with the requirements of the Standards Act.
COUNT TWO (AWARD IS ARBITRARY AND CAPRICIOUS)
The allegations of the foregoing paragraphs are incorporated as re-alleged herein. The Award should be vacated because it is arbitrary and capricious insofar as it
grants increases in wages and pension benefits despite the overwhelming evidence of economic difficulties and resulting hardships, is not based on substantial evidence and lacks a rational connection between the award of increased wages and pension benefits and the record evidence. 44. Further, the Award should be vacated because it is arbitrary and capricious insofar
as it makes determinations with respect to new subcontracting and pay band arrangements which .are not based on substantial evidence and/or lack any rational connection to the record evidence.
COUNT THREE (BOARD EXCEEDED ITS. AUTHORITY)
The allegations of the foregoing paragraphs are incorporated as re-alleged herein.· .
The general wage adjustments, the pension benefit increases, and the new subcontracting and pay band arrangements granted by the Award should be vacated because the Board exceeded its authority, and the Awardcannot be fairly corrected
WHEREFORE, WMATA respectfully requests that this Court vacate the general wage adjustments, the pension benefit increases, and the new subcontracting and pay band -14-
arrangements granted by the Arbitration Award issued by the Board led by Neutral Chairman Kenneth E. Moffett on January 13, 2(H2, and grant WMATA such other relief as may be just and proper in this case.
. Robert G. Ames, Bar No. 23 93 RobertA. Friedman, BarNo. 483838 VenableLLP 575_7th Street, N.W. Washington, D.C. 20004 (202) 344-4000 (202) 344-8300 (facsimile) rgames@Venable.com email@example.com Carol B. O'Keeffe, General Counsel Bruce P. Heppen, Deputy General Counsel
600 Fifth Street, NW Washington, DC 20001 (202) 962-1234 (202) 962-2550. firstname.lastname@example.org email@example.com Counsel for WMATA