MTI Report 01-02
TRANSIT LABOR RELATIONS GUIDE
September 2001
Herbert H. Oestreich (Principal Investigator)
George L. Whaley (Research Associate)
a publication of the
Mineta Transportation Institute
College of Business
San Jose State University
San Jose, CA 95192-0219
Created by Congress in 1991
purpose and scope of the study 1
two collective bargaining systems 2
A Brief History of Transit Labor relations 5
the earliest form of transit: Ferry Boats 5
The horse-drawn transit vehicle era 6
the economic and political environment
of transit relations 17
the political role of the transit strike 29
the political complexities of the public sector 30
the legal environment of transit labor relations 37
private sector transit employers and employees 37
public sector transit employers and employees 42
early enabling state legislation 45
enabling state legislation since 1964 47
states which still prohibit public sector
collective bargaining 51
USING INTEREST-BASED OR WIN-WIN NEGOTIATING TECHNIQUES TO
TURN CONFLICT INTO COOPERATION 64
THE FOUR PRINCIPLES OF WIN-WIN OR INTEREST-BASED NEGOTIATIONS 64
LONG-TERM LABOR-MANAGEMENT PARTNERSHIPS 69
FROM INTEREST-BASED NEGOTIATIONS TO JOINT LABOR-
MANAGEMENT COMMITTEES 71
INTEREST-BASED NEGOTIATIONS 71
joint labor-management committees 71
transit-specific examples of labor-management
partnerships 72
lessons learned from history 79
political functions of strikes and strike threats 80
success factors in long-term labor-management
partnerships 80
appendix a
interest-based bargaining guidelines 109
other names for interest-based bargaining 109
Appendix B
labor-management committee guidelines 115
other names for labor-management committee 115
suggested meeting evaluation form 120
appendix c
drug and alcohol testing procedures 123
herbert h. oestreich (principal investigator) 129
Transit organizations, both public and private, are under great internal and external pressures today to improve their organizational effectiveness. Studies have shown that the collective bargaining relationship between union and management, particularly the collective bargaining agreement, has a direct, measurable effect on organizational effectiveness. Both transit management and transit unions have begun to recognize that it is in their mutual interest to improve organizational effectiveness by turning toward a more cooperative collective bargaining relationship. Yet there is a scarcity of information as to why many of these experiments have failed. To the best of our knowledge, there is no up-to-date labor relations guide that is transit specific and emphasizes labor-management cooperative programs.
This report is intended to be a practical guide for transit managers, supervisors, union leaders, members of labor or management negotiating committees, joint labor-management committees, and anyone else who is involved in labor relations in the transit industry. This guide assumes that the reader has only modest experience with collective bargaining negotiations, or none at all. Readers who are experienced negotiators may wish to skip the section in this report called "Some Negotiating Basics" as well as the section near the end of this guide entitled "Glossary of Abbreviations, Acronyms and Terms."
The information this report offers builds upon the studies of many individual authors, reports of government task forces, and interviews with experienced labor relations practitioners in transit. Major emphasis in this study is placed on the newer approaches to transit labor relations, namely interest-based bargaining and joint-labor management problem-solving committees.
What do we mean by transit? In trying to limit our investigation, we were guided by the following definition by the Subcommittee on Definitions of the Transit Research Board, which served us best in limiting the scope of our research project:
transit, public (mass transit)-passenger transportation service, usually local, that is available to any person who pays a prescribed fare; it operates on established schedules along designated routes with specific stops (e.g., bus, light rail, rapid transit).1
We have further limited our discussion to surface transit, omitting ocean and air transportation of passengers. In addition, we decided to exclude conventional railroads because they work under a different legal framework and have a different type of labor relations system than transit organizations. We have, however, included certain metropolitan commuter railroad operations when it seemed relevant to the topic of labor-management partnerships. We have also included some discussion of the devastating Greyhound strikes, even though Greyhound Lines provides inter-city passenger service and, strictly speaking, does not fit the definition of "transit" we have given above. We have done so because of the profound impact the Greyhound strikes had on local transit operations, particularly the major union in the transit field--the Amalgamated Transit Union (ATU).
This study utilized a wide variety of data collection techniques: literature review, Internet searches, formal and informal face-to-face interviews, telephone interviews, correspondence with knowledgeable authors and practitioners, and information gathered at conferences. Since both authors are also professional trainers for the National Transit Institute, they took advantage of the opportunities in many of their training sessions to gather information from transit practitioners participating in these training programs. Our interview sample may be called a "convenience sample" of experts and experienced practitioners.
In the last two decades, profound changes have taken place in this country in the way unions and management deal with each other. The transit industry is no exception, although the changes there have been considerably slower. In the past, union and management in transit have negotiated their collective bargaining agreements largely through adversarial, even hostile, bargaining, sometimes called distributive bargaining or positional bargaining. They competed with each other over how big a slice of a fixed-size economic pie, or profits, each would get. They were willing to risk a strike or lockout, if necessary.
A threat to the economic or political survival to both parties caused some of them to re-evaluate their adversarial union-management relationship and try a more cooperative approach to collective bargaining. They began what is commonly called interest-based bargaining. Others maintained their adversarial collective bargaining relationship.
Today both approaches co-exist, even though they seem to be diametrically opposed to each other. Both seem to work, at least for the time being. As a matter of fact, in some cases the same parties over time alternate between the two approaches, but usually not without at least one of them perceiving interest-based bargaining as a failure. In this study we have explored the reasons for these failures, perceived or real, as well as some of the factors that contributed to the success of the more cooperative approaches.
The earliest form of transit in this country was ferryboats. Rivers were the forerunners of today's highways; however, they often presented formidable obstacles for those traveling on foot or on horseback. In the past, these travelers needed a ferryboat to get from one side of the river to the other because large bridges did not yet exist.
We can say that the earliest ferrymen were Native American Indians. Records show that they carried Spanish soldiers across the southern rivers as early as 1540.2 We do not know whether in those days they worked for some type of compensation or not. Perhaps their only reward was that their lives were spared. Much later, they carried western settlers and traders across the waters. Still later, some of the settlers themselves became ferryboat operators. In those days, before huge bridges were being built, ferries linked many of the colonial settlements. Eventually, ferryboat operators started to work for wages, and later formed unions. Unfortunately, we do not know when they started to unionize. Early historians and economists had little interest in labor history and left us no records. We do know, however, that there already existed a fairly sizable union of ferryboat operators in California around the turn of the century. It was an independent union that called itself the Ferryboatsmen's Union. In the early 1920s it became the first San Francisco Bay Area union to admit members of all races to its ranks. It later became the Inlandboatmen's Union of the Pacific (IBU). In the 1940s, the IBU became affiliated with the Seafarers International Union (SIU), an action it came to regret, for the SIU infringed upon the autonomy the IBU was used to and often undermined its traditional occupational and geographic jurisdictions. In the 1970s, IBU members overwhelmingly voted to break the union's affiliation with the SIU. In order to enhance its economic and political power, the IBU affiliated in 1980 with the International Longshoremen Association, known for its militant unionism and political activism.
The reader may wonder where the term "longshoremen" comes from. In the old days, when cargo ships needed to be loaded or unloaded, labor was often simply recruited at the last minute on the shoreside by having a crier yell, "Men along the shore!" and hire the men needed to load or unload a ship on the spot. The union later changed its name to International Longshore and Warehouse Union (ILWU).
Early ferryboat operators, as well as longshoremen, were forced to work under miserable conditions: wage cuts, kickbacks, speedups, blacklists, and other union-busting practices by employers. In 1980, about 700 members of the Inlandboatsmen's Union (IBU) went on strike against the Washington State Ferry System. When the strike leaders were jailed, the ILWU came to their rescue by having their locals shut down the Puget Sounds ports for 24 hours on April 15, 1980. The work stoppage led to serious collective bargaining between the State Ferry System and the IBU, and the union won considerable improvements in working conditions. After the strike, the IBU decided to affiliate with ILWU, which had helped it win the strike. It has apparently been a very successful affiliation because the ILWU allowed the IBU considerable autonomy; the IBU won more strikes, increased its membership, and even participated in the ILWU's political activities. Today the Marine Division of the ILWU represents a large number of ferryboat operators.3
Transit, as we know the term today, did not really begin until the 19th century when the distances between home and work in the larger cities had become too large to walk on foot. Horse-pulled stagecoaches were introduced and were used by those who could afford them. This form of passenger transportation was first introduced on a large scale on the streets of New York City in 1827. It quickly grew in popularity, and by 1835 over a hundred such "omnibuses" ran in New York City.
By 1885, close to 600 horse-drawn omnibuses ran over 26 fixed routes in the city, and actually started to cause the first urban traffic congestion.4 Later, these horse-pulled stagecoaches were put on special wheels that ran on railroad tracks because there were no paved, or only poorly paved streets in those days. The earlier chroniclers of the labor movement claimed that the horses that pulled the streetcars were treated better than the drivers, who were on duty from the early morning hours until the horses were returned to the barn late at night. These drivers, more often than not, put in an 18-hour workday. The horses, on the other hand, worked only a four-hour day or less. It cost more money to replace a horse than a worker in those days.
Transit workers could be required to work as many as 20 hours a day for the same daily wage, without any additional compensation for the extra time worked. Transit workers had no benefits and no job security. They had no holidays, no vacations, no pension, and no health care. Absence from work, no matter what the reason, would often cost transit workers their jobs.
Dissatisfied with their working conditions, the early streetcar workers formed the first known labor union in the transit industry in this country. A driver on New York's Third Avenue Line by the name of John Walker is credited by labor historians as being the leader behind the formation of this union, regarded to be the forerunner of what is now known as the Amalgamated Transit Union (ATU). His success was short-lived. Powerful opposition by the streetcar company, and the outbreak of the Civil War, caused the union to falter. Attempts more than 20 years later to revive this and other transit unions did not fare much better. It was not until December 1885 that a rebuilt union proposed a labor contract to the management of the Third Avenue Line that was accepted. Soon after, the union also presented a list of grievances to the management of the Sixth Avenue Railway only to have it ignored for three weeks. After three weeks the workers went on strike, and the company signed a contract only five hours later. More union organizing and negotiating successes in New York City followed--first with the smaller, then with the larger companies. Word of the labor union's success spread throughout the country, and transit employees all over the U.S. joined organized labor's push to end the 18-hour workday and demanded an 8-hour workday. They eventually managed to get the 12-hour workday. Much to the dismay of many union leaders, many transit workers thought they had achieved their purpose and left their transit unions, leaving them once again powerless.5
In 1892, Samuel Gompers, president of the American Federation of Labor (AFL), the historic statesman of American labor, called a national convention of unionized transit workers in this country. The 50 representatives of 22 local unions from all over the United States formed the first nation-wide union of transit workers. They called it the Amalgamated Association of Street Railway Employees of America. Shortly afterwards, the name was changed to Amalgamated Association of Street, Railway, and Motor Coach Employees of America. In 1963, it was decided to shorten the name to Amalgamated Transit Union. 6
Horse-drawn streetcars were followed by steam railroads and electric cable cars running on rails as technology developed. It was not until the 1910-1920 decade that improved street pavement and the emergence of internal combustion engines led to the introduction of bus traffic in the larger cities.7 With few exceptions, by 1939 most city transportation systems had been replaced by buses. In those days, most public transit services were provided by private firms operating for profit. During World War II, privately owned municipal transit systems grew because of the needs of the war industry and the shortage of fuel and rubber needed for the war effort. After World War II, highway expansion and increased availability of private automobiles led to a fast decline of public mass transportation throughout the 1950s and 1960s. Low ridership led to widespread financial crises for the private transit companies, and to wage cuts and layoffs all over the country. In many places bus drivers and maintenance workers struck in protest of the wage cuts. Finally, the continuing financial crises forced most private transit companies out of business.
After 1964 many transit unions, particularly the ATU, started to join forces with the local business community and local politicians to influence state legislators to pass "enabling legislation," which created public transit systems. The passing of this type of state legislation generally provided state funding for the establishment and operation of these public transit systems. Often these state funding sources were supplemented or replaced by local tax funding sources. In addition to providing funds for publicly owned transit operations, this type of enabling state legislation also created public transit authorities to govern the public transit organizations, and generally set forth a number of collective bargaining protections for union members.8
By the 1970s, most public transit in the United States had become government-owned, but not without massive financial assistance from the federal government. That assistance did not come without strings attached. To be eligible for federal funds transit entities had to adhere to numerous conditions, requirements, and regulations. The federal government exercised enormous influence on transit operations.9 The Amalgamated Transit Unit grew rapidly in membership as a result of the passage of the 1964 Urban Mass Transportation Act (UMTA) discussed in the chapter on the Legal Environment of Transit Labor Relations. The UMTA literally saved public mass transportation and with it boosted the strength of transit unions. The ATU and other transit unions had lobbied Congress aggressively to make sure that transit workers of private transit companies who became public employees of federally funded public transit authorities suffered no loss of collective bargaining rights in the takeover. These protections were in Section 13(c) of the UMTA of 1964, indeed a landmark in legal protections of unions and their members. These 13c protections, coupled with the enabling state legislation previously mentioned, greatly enhanced the power of transit unions by preserving all of the private sector union rights contained in the National Labor Relations Act protections as their members moved from private sector to public sector employee status. Following the passage of the UMTA, even the most conservative states, which had previously outlawed public sector collective bargaining, quickly changed whatever legislation needed to be changed to qualify for federal funding under the UMTA. Between 1964 and 1974, 40 states passed legislation creating public transit authorities, and most of them made sure that there was no interference in their transit legislation with 13c protections of the UMTA. When revised versions of the UMTA were passed by Congress between 1974 and 1991, the old collective bargaining protections, and with it the power of transit unions, were preserved.
Although Greyhound passenger service is inter-city in nature, and therefore does not fit our strict definition of "transit," we believe a discussion of two large strikes at Greyhound are relevant to labor management relations across the transportation industry. They made history in the entire transportation industry. They had profound impact on local transit operations as well, particularly the major union in the transit field, the Amalgamated Transit Union (ATU). They helped shape the future relationship between the ATU and transit facilities. They gave the national leadership of the ATU a powerful reason to champion interest-based bargaining in the transit industry, which was ready for a change.
A seven-week strike occurred at Greyhound in 1983. Another one started in 1990 and ended more than three years later. Both made history. Both had devastating consequences, for both the union and the company. Greyhound Bus Lines had experienced strikes before 1983, but they were generally only local strikes with relatively modest impact on the company's labor relations and its financial health. Generally speaking, the relationship between company and union had been good, and both sides had prospered. All that changed dramatically in November of 1983, when contract negotiations between the company and the ATU broke down and a bitter, highly publicized nationwide strike erupted. It was a strike marked by physical violence between striking employees and the company's newly hired striker replacements. It was a seven-week long strike that the ATU could not win. Some 12,700 ATU members walked off the job. Many of them regretted it, especially as Christmas drew closer and closer.
Before 1982, Greyhound was a prosperous company that prided itself on paying the highest wages in the industry. Greyhound all but ignored its competition, including a company named Trailways, its main competitor, which paid considerably lower wage rates than Greyhound. Considering Trailways' frail financial situation and the prospect of losing union members' jobs, the ATU agreed in early 1982 to a wage freeze at Trailways. Lower wages enabled Trailways to launch a major price war against Greyhound, well publicizing its lower bus fares.
At first Greyhound ignored Trailways' discounted fares and price war publicity. During spring of 1983, however, Greyhound began to experience a sharp decline in ridership. Passengers had become more price conscious. As a result, Greyhound had no choice but to drop its fares. Deregulation of the transportation industry made the competition for passengers even stiffer. New entrepreneurs who paid low wages entered the business and offered fare prices much lower than the more established inter-city lines.
The newly deregulated airline industry made things even worse for Greyhound. Low-cost passenger airline carriers sprang up after deregulation of the industry and gave intercity bus lines a run for their money. People Express, for example, charged only $23 for a flight between New York City and Buffalo. Greyhound charged $41 for the trip. A flight by Southwest Airlines from San Francisco to Phoenix was only $60, compared to a Greyhound's bus ticket to the same location costing $79. By the middle of 1983, Greyhound showed an operating loss of $18 million. Greyhound's operating costs were 30 to 50 percent higher than that of other major bus lines. The company was paying about $62 million a year more for salary and benefits of its nearly 7,500 bus drivers than other bus companies. The difference in wage and benefit cost for mechanics, service personnel and office employees between Greyhound and its competitors showed a similar disparity.10 No wonder during the 1983 contract negotiations with the ATU, Greyhound insisted on a 9.5 percent wage cut. Union leaders and union members were outraged, and a bitter strike ensued. Unfortunately for the union, it came during a period of high nationwide unemployment and only weeks before Christmas.
The company was ready. It had already recruited more than 1,300 new hires in anticipation of the strike. Many of them were experienced drivers of other bus companies. The company announced that it would replace all striking employees with new hires at the lower, prevailing industry wage rate. The company gave its all in resisting the strike and kept the buses rolling. It trained new drivers, sent hundreds of executives to do field work, video taped acts of violence on the picket line, and did everything in its power to fight the union in the courts. Still, replacing the entire workforce on strike was costly and time consuming. Both sides felt the economic pressure. Greyhound had to cut back on its passenger service. The company had lost much business, and the union many jobs.
In an attempt to get striking employees to return to work, Greyhound lowered its proposed pay cut to 7.8 percent. The union leaders submitted the offer to a vote of its 12,000 members but recommended strongly against it. As one might expect, the overwhelming majority of those voting rejected the offer. Federal mediators entered the picture. They eventually managed to broker a tentative agreement on December 2, 1983. The union agreed to send the last offer of the company, including the 7.8 percent wage cut, to the homes of its members for a vote, to be returned by mail. The vote count on December 19, 1983, showed that this time an overwhelming majority of striking employees decided to return to work. A painful seven-week strike had come to an end just a few days before Christmas. But the ATU had suffered a major defeat that would haunt it for years to come. It had to settle for the same 7.8 percent wage cut the company had insisted on way back in November. In addition, the union had to swallow a cut in pay from ten to eight percent per year; a four percent cut in pension benefits, and a two-tier pay schedule that paid new hires 20-25 percent less than employees under the old contract.11 Greyhound, on the other hand, boasted that it had gained the wage parity it had been seeking, yet at the same time paid the highest wages in the industry. At that time, labor costs amounted to about 62 percent of total operating costs. The union's concessions had brought the company about an eight- percent reduction in bus line operating expenses over the life of the new three-year contract.12
The company's victorious feelings were short-lived. Economic pressures kept increasing. The deterioration of economic conditions in the inter-city bus industry in general continued to get worse, and with it the strength of the ATU deteriorated further. In 1984 Greyhound laid off about 1,500 employees, including 400 supervisors, and in 1985 sold 120 bus terminals, terminating 2,000 more employees, and franchised many routes to lower-cost bus companies. Amongst economic chaos, in 1987 a group of Greyhound investors, led by Fred Currey, acquired Trailways, Greyhound's major competitor, in a leveraged buyout. Approximately 1,400 Trailways bus drivers were absorbed into ATU bargaining unit at Greyhound. Greyhound gave them full seniority for their years at Trailways. In the contract negotiations that followed, ATU members suffered further wage cuts, even greater than before. In addition, they had to agree to another two-tier pay schedule, under which new hires would be making even less than they did already.13
By the time the next contract negotiation between the ATU and Greyhound Lines came around in 1989, the company's profits had improved, although it still had a large debt burden. With the news of improved profits in 1989 came employee expectations of higher pay. The company strenuously resisted union demands for a wage increase citing its heavy debt burden, claiming that its profit in 1989 was modest, and that it had incurred losses amounting to $20 million the previous two years. In addition, the company emphasized its need to keep its labor cost down because of the heavy competition from railroads and airlines.14 The union claimed that the company had understated its profits, and that its heavy debts were due to poor management. The acquisition of Trailways alone had increased Greyhound's debt by $80 million, bringing the company's total long-term indebtedness to $300 million. Given its increased profits in 1989, the ATU claimed that the company could afford higher wages.15 Yet by June 1990, Greyhound had declared bankruptcy.
By the time the collective bargaining agreement had expired on March 2, 1990, the parties were still hopelessly deadlocked. Greyhound management refused to extend the current contract, and a bitter strike ensued. It was the most violent strike the industry had ever seen, marred by dozens of shootings, over 100 bomb threats, and even one striker being killed by a bus driven by a striker replacement. Close to 9,000 Greyhound employees were out of work, and the company once again hired a large number of striker replacements. The ATU claimed, with a good deal of justification, that Greyhound was out to bust the union. Greyhound CEO Fred Currey certainly was no friend of organized labor. The ATU filed unfair labor practices charges with the National Labor Relations Board (NLRB), which were later upheld. The ATU pointed out that Greyhound had already advertised that it was hiring permanent striker replacements while it was still in negotiations with the union, and had already hired and trained hundreds of non-union strike breakers well before the strike began.
As the strike progressed Greyhound continued operations, using more than 2,450 strike-breakers. The union successfully enlisted public and government support by pointing out that striker replacements were poorly trained and presented a danger to public safety. It also publicized injuries of strikers on the picket line and blamed the company for inciting the violence.16
Union attempts to get legislation passed to make the hiring of strike-breakers illegal were unsuccessful. Both the union and the company, however, filed a large number of unfair labor practice charges with the NLRB, and even initiated lawsuits in the courts. They accused each other of inciting violence on the picket lines and illegal collective bargaining practices. One of the most shocking examples of strike violence occurred in Redding, California, when a striking ATU member was killed by a Greyhound bus driven by a newly hired strike-breaker. In March 1990, Greyhound broke off further negotiations. As time went on, and no end seemed to be in sight, the strikers became more and more weary. The picket lines at Greyhound bus terminals around the country grew thinner and thinner. Drivers started to cross the very picket lines they had staffed earlier. In 1993, near the second anniversary of the strike, when about 1,500 striking employees had already returned to work, the ATU capitulated and told its members that they were free to return to work.17
Did Greyhound "win" the strike? Certainly not. Both sides had lost, and lost badly. Before the 1990 strike, Greyhound had employed 6,300 drivers. When the dispute ended, there were only 3,300.18 The ATU suffered devastating losses in membership. The company was already bankrupt by the middle of 1990. CEO Fred Currey lost his job, and he was replaced by Frank Schmieder, who had a reputation of being less hostile to unions than his predecessor. The company lost its appeals to the NLRB. Both sides had filed over a hundred charges, claiming unfair labor practices by the other during the strike. On the major issues, the NLRB ruled in favor of the union. It decided that the strike had been caused and delayed by the illegal practices of the company--practices that included bargaining in bad faith, illegally giving striker replacements seniority over striking drivers, making unlawful bargaining proposals, interfering with employees' rights to engage in lawful union activities, and unlawfully discharging over 200 striking drivers nationwide.
But the union lost also. Although the NLRB awarded $22 million in back pay to ATU employees, the bankruptcy courts severely limited the back pay to which striking workers were entitled.19 The NLRB rulings, and a more conciliatory attitude of the new Greyhound CEO Frank Schmieder, however, led to renewed contract negotiations between the ATU and Greyhound. This resulted in an agreement reached in April 1993, more than three years after the previous contract had expired. The ATU had reestablished its right to represent Greyhound workers, but Greyhound gained the right to retain the replacement workers it had hired during the strike. The ATU won the recall of 550 drivers still on strike and the reinstatement of workers the company had fired for violence related incidents. The contract, which the ATU membership ratified in May 1993, called for a 20 percent wage increase for employees over the life of the six-year contract, in addition to the $22 million in back pay to eligible strikers which the NLRB had previously awarded the union.20
It is difficult to overestimate the impact these two Greyhound strikes had on labor relations in the entire transportation industry, including transit. The realization that strikes of this magnitude could ruin both union and company brought about a greater willingness on both sides to engage in interest-based bargaining and other forms of union-management cooperation. We have encountered union leaders in transit facilities who used to work for Greyhound and who still remember the hardships the Greyhound strike brought to striking drivers and mechanics. Said one interviewee, the chair of the union negotiating committee at a transit facility:
When the company and the national VP of the ATU suggested that we try interest-based bargaining here at this transit facility, I was ready. I have been through three strikes in 10 years, including the big one at Greyhound. I am a middle-aged woman, a single parent. I knew I couldn't afford another strike...Nobody ever wins in a strike, even if you get what you want. By the time the strike gets settled, for the most part you have lost a lot, and it takes years to recoup it. As far as I was concerned, strike was not an option...there had to be a better way...The others [who once worked at Greyhound] felt the same way.21
The losses suffered during the Greyhound strikes also caused the national leadership of the ATU to re-evaluate its bargaining relationship with transit companies. Jim LaSala, president of the ATU, became a champion of interest-based bargaining. Terry Van der AA, founder of and CEO of Vancom Transportation, which owns a number of transit companies in this country, spoke of a meeting he had with Jim LaSala in Washington in 1993:
I have to give Jim LaSala credit. He had just been through the Greyhound strike for three years. ATU had lost two-thirds of its membership, and the strike almost ruined Greyhound. When I was in his office in Washington, he said that the ex CEO of Greyhound had sat in the same chair I was sitting in and had told him the same thing that I was telling him about working together. LaSala said: "I should have listened." He now recognized, because of the Greyhound strike, that whoever ATU's employees worked for had to be successful, or else ATU was not successful. The Greyhound contract now has some elements of participation in it, and LaSala was introduced to those by Greyhound. When the whole thing was settled, Secretary of Labor Reich was at the final signing of the contract and gave both sides accolades for reinventing, if you will, labor relationships. It's possible that LaSala liked that sense of being a pioneer. 22
There are lessons to be learned by transit management and transit unions, not only from the Greyhound strikes, but strikes in the airline industry as well--particularly those experienced by Eastern Airlines. Kenneth Jennings, distinguished labor relations scholar, has noted that Eastern Airlines failed to learn from the Greyhound experience, and as a result, suffered the same fate. According to Jennings, there are several lessons we need to learn from the Eastern Airline and Greyhound experiences, lessons that apply to the entire transportation industry:
Destructive labor relations have adverse effects on a company's financial and marketing position, which can only be reversed by the parties themselves, not by government intervention.
Management must be proactive in its dealings with union officials if it wants to reverse hostile labor relations. It cannot wait for the union to make the first move toward a more conciliatory approach.
Striker replacement policy creates horrendous legal problems, and legal problems have a habit of dragging on and on.
A weak and fragmented union typically offers more disadvantages than advantages for management. A weak union cannot facilitate the collective bargaining process because union officers, when faced with this situation, typically spend most of their time and energies quelling political rivals and appeasing the various factions within the union, and while negotiating, management cannot be sure that union negotiators really speak for the union membership. Agreements reached with union leaders at the bargaining table will easily unravel when a competing faction within the union convinces the membership that the proposals are not in their best interests. 23
As we shall see in our discussion on examples of cooperative relationships between unions and management in the transit industry, such relationships tend to avoid the above pitfalls.
The economic AND POLITICAL ENVIRONMENT OF TRANSIT LABOR RELATIONS
Labor relations in the transit industry are shaped by both economic and political realities. They are realities that may be unique to the entire transit industry or only to certain districts. Nevertheless, they govern the behavior of union and management representatives at the bargaining table and in their day-to-day relationships.
The transit industry is a highly labor intensive industry. About 80 percent of transit operating cost is labor cost. Yet fare box collections cover only about 50 percent of operating cost. It is extremely difficult to render almost any kind of mass transportation service as a profit-making enterprise in the United States today. Both operating cost and capital improvements require public funds. In addition to fare box revenues, funds to operate a public transit system will most likely come from a variety of other sources, such as sales taxes, property taxes, and government subsidies. The justification for supporting transit with public funds is that transit benefits not only the passengers but also the community as a whole. Real estate developers, for example, benefit from having transit services provide access to their developments, retail merchants benefit from having access provided to their sales outlets, residents of high density areas benefit from a reduction of automobile congestion, and employers may need smaller size parking lots because of employee access to their work places by public transit. 24
Most states provide aid for mass transit either in the form of direct contribution to the transit facility or as a budget allocation that is part of "enabling legislation." This means that state legislation, which creates local transit authorities also sets forth their powers and conditions to which transit authority policies must conform. Such state legislation is almost always drafted in such a way that it enables local transit authorities to qualify for federal funding. Typically the amount of state funding that is granted depends on the percentage of the cost that local transit authorities must bear of the cost for federally supported capital improvements.25 Local government subsidies for transit operations may come from local sales tax or allocations from municipal and county governments. All of this external funding is in the interest of both transit management and transit unions. It is in the interest of local transit management to seek close cooperation with its unions in trying to influence state legislators, state and federal regulators, local politicians, as well as taxpayers to support their requests for funding, favorable legislation and favorable interpretation of rules and regulations. In modern labor relations, an important role of unions is to help the employer enhance its ability to pay for wage and benefit increases for its membership. A financially healthy employer is needed to assure income and job security for union members.
In transit organizations, whether private or public, labor relations are heavily influenced by how well the transit facility is doing financially. The employer's ability to pay for wage and benefit increases is heavily influenced by ridership. Transit planners and policy makers often assume that the modern urban Americans should gladly use mass transit transportation to and from work. They claim it is cheaper, more convenient, and reduces the overcrowding of highways and city streets. They rack their brains over how they might entice commuters to go to and from work by bus or light rail, rather than in their own automobile.
Yet commuters are consistently rational in the mode of transportation they choose. What matters most to them is convenience and price.26 It is quite rational for people with reasonable incomes to travel to and from work by car, rather than subject themselves to the discomfort and inconveniences of standing in line at bus or rail stops, standing up like cattle in crowded transit vehicles with poor heating or air conditioning, and taking twice as long to get to work or home than in their automobile. Indeed, they are quite willing to pay for the difference in comfort and convenience. In fact, only lack of parking space, exorbitant parking fees and unbearable traffic congestion are likely to make them change their commuting habits.
Transit organizations, on the other hand are under great political pressure to keep fares low. Without new sources of revenue, they find it difficult to improve the comfort and convenience of transit commuter travel. As we shall see in the chapter on labor-management partnerships, jointly administered employee participation programs can do a lot to solve the dilemma, and to find creative ways to make it more attractive for commuters to travel in transit vehicles, without charging exorbitant fares. But it takes an innovative spirit on both sides, great patience, and persistence to be successful. These efforts require changes in the organizational culture of both management and union.
Air pollution has become a major crisis in many of our cities and the nation in general. It is here that transit organizations and their unions can make a difference. The personal automobile is a far greater contributor to air pollution than mass transit vehicles. Buses and light rail vehicles contribute only a very small fraction to total city air pollution compared to the personal automobile for the same passenger volume. By the same token, during peak traffic hours the fuel consumption of transit buses and rapid rail vehicles per passenger mile is far, far less than that of personal automobile consumption.27
We all know that, but tend to do little about it. Transit unions and management can work together for mutual gain in this area in appealing to legislators, local politicians and community groups to lend financial support to transit organizations to upgrade transit vehicles and service in order to make transit more attractive to commuters, increase ridership and to reduce air pollution and fuel consumption.
In recent years it has become increasingly apparent that both transit unions and transit management must play a greater role in helping their transit organization remain economically competitive. For that reason, it has become more common to negotiate employee incentive plans into the collective bargaining agreement. Most of these reward employees for good attendance, a crucial element in a transit organization's overall performance. In addition, these kinds of performance incentive plans have found their way to the bargaining table: 28
Bonuses rewarding on-time performance.
Bonuses rewarding accident-free driving.
Hourly wage increases based on meeting ridership goals
Wages for service workers based on number of buses cleaned and fueled.
Mechanics' wages or bonuses based on percentage of vehicle fleet available for service.
Drivers' wages or bonuses related to fare box recovery ratio.
These incentives, designed to enhance the competitiveness of transit employers, are usually "mandatory subjects" of collective bargaining. This means that the law requires that if one side wants to negotiate the issue, the other must demonstrate a willingness to do so. The legal obligation to negotiate, of course, does not mean there is a legal obligation to agree.
Transit unions have traditionally opposed the use of part-time transit vehicle operators. They have tended to view part-time labor as a threat to their members' job security and hard-won collective bargaining gains, particularly overtime pay, holiday pay and other fringe benefits. Transit organizations, on the other hand, have sought to meet peak time staffing needs, internal and external pressures for productivity improvements, and labor cost reductions by employing part-time operators.
The typical transit organization has about twice as many vehicles running during commuter peak hours as during the rest of the day. As a result, transit agencies have fought bitter fights at the bargaining table to get unions to agree to the use of part-time operators to deal with these staffing and payroll problems. Since the use of part-time labor directly affects the working conditions of union members who hold the same jobs, the part-time staffing of operators' jobs is a "mandatory subject of bargaining." As we have said before, mandatory subjects of bargaining are those issues which, by law, must be negotiated if either side insists on it. In other words, neither side can refuse to negotiate over it if the other side brings it up. The legal obligation to negotiate, of course, does not mean that there is an obligation to agree. And indeed it has not been easy in past decades for transit unions and transit management to agree on the part-time labor issue. Strikes have occurred, and transit agencies have often made heavy concessions during contract negotiations to get unions to agree to the use of part-time operators. As a result, since the early 1980s, contract provisions allowing the use of part-time transit vehicle operators have become practically universal.29
For example, the collective bargaining agreement between ATU Local 1309 and the San Diego Transit Corporation covers part-time drivers, and contains specific, elaborate provisions for them. It defines "part-time driver" as someone who drives no more than 30 hours per week. The same union-management contract also limits the hiring of part-time drivers to no more than 15 percent of full-time operators and only if there are at least 425 full-time operators employed. The agreement also specifies the conditions under which a part-time driver must be given an opportunity to advance to full-time status. Part-time drivers may not work more than 6 hours a day, and have to be paid the same hourly rate as full-time operators, but are not eligible for overtime or holiday premium pay. Nor are they eligible to accrue such fringe benefits as vacation, sick leave, death benefit, holidays, pension, or health benefits. When part-time drivers become full-time employees, they receive proportionate credit for their part-time employment toward wage progression and seniority. No full-time operator can be laid off while part-time drivers are still employed. At the close of each pay period, the company must furnish the union with an accounting of hours worked by each part-time employee.30
We can see in this example, and many others that could be cited, that whatever productivity improvements have come from the use of part-time operators have come largely from a decrease in fringe benefit cost, not direct wages. Part-time operators generally receive fewer fringe benefits than full-time operators do. There is also some evidence that part-time operators have less absenteeism and lower accident rates. According to one reputable study, however, it is questionable that, when all things are considered, transit organizations save more money by the use of part-time operators than they give away to the union in concessions at the bargaining table. The benefit of the use of part-time operators comes more from greater efficiencies in scheduling, greater customer satisfaction and lower absenteeism than lower wages and lower fringe benefit costs.31 As a matter of fact, most transit unions will oppose a two-tier wage system: one pay rate for full-timers and a lower one for part-timers. Whatever labor cost savings there are may come from paying little or nothing for benefits for part-timers. Transit unions that vigorously oppose a two-tier wage system sometimes create one by ignoring the benefit "tier." One transit labor professional said:
I have seen unions say no to two-tiered wage agreements, and the same union will negotiate a clause for part-timers working 35 hours a week without benefits-which turns out to be a two-tiered wage structure.32
The use of part-timers in transit operations continues to be a controversial issue. No doubt, we will see some changes in the benefit packages for part-timers in the future, most likely toward more, rather than less, benefits.
Privatization and outsourcing (subcontracting) of certain public transit services traditionally rendered by state and local governments have been in vogue for a number of decades. Privatization refers to the transfer of an entire organization into private individual or corporate ownership. "Subcontracting" or "outsourcing" is usually more limited in scope and refers to public agencies subcontracting only certain jobs or services to private sub-contractors, but retaining tight controls as primary contractors over the way these services are performed. Discussions over the topic of privatization sometimes become confusing because writers do not always distinguish between privatization of the entire transit property and subcontracting only certain parts of its operation.33
The debates over privatization and subcontracting of transit services have been going on for decades, and volumes have been written on the subject. Unions have been very active participants in this debate, and rightfully so. Obviously, privatization and subcontracting deeply affect union members' job security, working conditions, and collective bargaining rights. Many writers would have us believe that there is a very strong trend toward privatization of transit services. The evidence is mixed. According to an elite task force appointed by the U.S. Department of Labor, the trend toward privatization of government services has been exaggerated. According to that task force, the increase in subcontracting by public agencies to private contractors is far less dramatic than popular reporting suggests. New subcontracting is actually quite limited and normally restricted to only a few services, and usually affects relatively few employees. Furthermore, contrary to popular opinion, the cost of providing public services through private enterprises is not necessarily lower than providing the same services by a government agency. Some projected costs actually represent merely cost shifting from one budget to another, or present budget to future budget. For example, a payroll saving in one jurisdiction may actually show up as added health and welfare costs in someone else's budget. Real cost savings depend largely on managerial leadership and imagination of employees, and union officials, no matter whether they are in a private or government organization.34
One reason that contracting out of public agency services is not as widespread as often assumed is that the process is not as easy as it appears. Developing effective bidding procedures, evaluating the bids, monitoring the contracts, and measuring the performance of contractors is far more complicated than meets the eye. The study results of the task force appointed by the U.S. Department of Labor suggest that there is generally a lack of adequate data to measure cost and quality in order to determine whether contracting out was an improvement or not. Most public jurisdictions do not collect the kind of financial data needed to allow those comparisons. It is a mistake to assume that wage and benefit levels differ drastically between private and public employers. It is a mistake, says the previously mentioned task force, to assume that the quality of services performed by government employees is lower than the quality of services rendered by private enterprise employees. Excellent work is performed in both sectors, and poor quality services are also found in both sectors. The crucial difference is not what type of organization is providing the services, but whether employees are given the proper tools to do their work and management is doing its job. Where public employees have been given a full and fair chance to preserve their jobs by helping change the system, they have most often been able to demonstrate their ability to improve the quality of services and reduce costs. Most commonly this is accomplished through cooperative union-management relationships, particularly where employees and their union representatives have a free hand in making improvements, and participate in defining the ground rules for measuring cost savings and quality improvements.
People who are unfamiliar with labor unions often fail to deal with an important reality: Unions, by their very nature, are political organizations. Union leaders are elected; managers are appointed. This simple reality has profound impact on the behavior of unions, their leaders, and rank and file members. While all unions are political organizations, in the public sector their goals, strategies, and tactics are even more political than in the private sector. They have to be. Public-sector unions have learned decades ago that without influencing voters, political officials, legislators, school boards, commissions, agency directors and trustees the unions are like fish out of the water. Political officials control the purse strings of the labor management organizations; these same politicians put pressure on the labor management individuals who will ultimately deal with union concerns.
In our interviews, we encountered transit labor relations practitioners who reported that their union made an "end-run" to the board of directors of the transit authority, demanding that the general manager of their transit operations be fired. In some cases, they were let go; in others the general managers found themselves in such a severe crisis that they re-evaluated their relationship with the union and actually initiated a program of union-management collaboration within their operation. We also found a fair number of examples in which members of the transit board were bothered by press reports of poor labor-management relations in the transit organizations under their jurisdiction and put pressure on the transit organization to adopt a more cooperative strategy toward their unions.
In the public sector, transit union leaders must be doubly skillful in their political maneuvering. Local union leaders normally work hard to lobby the board of directors of transit authorities to put pressure on the management of the transit operating organization to treat the union well in contract negotiations and other dealings. From a management standpoint, the political power that transit unions wield is not all bad. That political power is often being used by transit unions to influence legislators and government regulators, particularly at the state level, to give favorable consideration to funding requests by their transit district.
The transit industry is almost completely unionized. Close to 95 percent of transit operating and maintenance employees belong to unions.35 The majority of them today are represented by three major unions:
Amalgamated Transit Union (ATU), which was founded in 1892, has a claimed membership of about 170, 000 members in 286 local unions in 46 states in the U.S. and nine provinces in Canada. It represents bus, subway, light rail, and ferry operators, as well clerks, mechanics and others in urban mass transit. Until 1974, the ATU accepted only urban mass transit employees for membership. In March of that year, it changed its policy and began organizing non-transit employees as well, particularly when transit workers were part of a larger city or county government bargaining unit that included crafts outside the transit field. ATU locals have always had the power to formulate their own bargaining demands and, for the most part, control contract negotiations on a local level. This does not mean that they may not request assistance from national headquarters of the union during local bargaining. Nationally speaking, the ATU is definitely the largest union in the country representing transit employees. The other two unions below represent primarily railroad and airline workers, but do have concentrations of transit employees in different regions of the country.
Transportation Workers Union (TWU) claims more than 140,000 members in the U.S. and Canada, including many railroad and airline workers. It has heavy concentrations of transit union members in New York and Philadelphia and was founded in 1934 by subway workers in New York City. Its traditional slogan "One for All, All for One," is practically a war cry in the union's militant history.
United Transportation Workers Union (UTU), which was founded in 1932, claims around 125,000 members, including a large number of members working in the railroad industry. Its Local Transit Division represents only about 8000 members who are bus drivers, bus maintenance mechanics, and other transit workers.36
When trying to interpret these figures, it is good to remember that these are all self-reported statistics. Furthermore, when reporting their membership figures, unions tend to include both active as well as retired members. These pensioners may generally participate in the election of local union officers but not on collective bargaining matters. We must also remember that there are other major unions that represent significant numbers of transit workers. Many of them cut across a wide range of occupations and industries other than transit, or they represent only a limited number of job classifications within a given transit organization. Among these other major unions are the Transportation Communication Union (TCU), the Service Employees International Union (SEIU), the International Brotherhood of Teamsters (IBT), the International Brotherhood of Electrical Workers (IBEW), the International Association of Machinists & Aerospace Workers (IAM), the American Federation of State, County and Municipal Employees (AFSCME), and a number of smaller associations representing transit police and security employees.
Some unions prefer the old adversarial type of collective bargaining; some are actively pursuing a policy of interest-based bargaining and other forms of union-management collaboration. The national leadership of the ATU has a definite policy of encouraging union-management collaboration on the part of its national leaders. One further characteristic of the ATU is that its national union leadership heavily favors interest arbitration, which involves a final and binding decision by third-party neutral when union and management reach an impasse in contract negotiations. Unions in other industries that have the legal right to strike tend to shun interest arbitration.
In the 1930s, when the Wagner Act with its sweeping labor union protections was passed, union members could strike without fear of losing their jobs. Private sector transit employees and their unions still have that right. Public sector transit employees and their unions, on the other hand, with few exceptions,37 do not have the legal right to strike. State law usually prohibits state and local government employees from striking; in practice, some of them strike anyway. Many states, however, give the governor of that state the right to seek a court injunction against the striking transit union, private or public sector, when the strike in the private transit enterprise is believed to seriously endanger public health and welfare. As an example, under California law, when in the governor's opinion a threatened or actual strike endangers public health, safety or welfare, he may appoint a board to investigate the labor dispute. While the investigation is going on, any strike is prohibited. When the governor receives the report from the investigative report, the governor may instruct the state's attorney general to petition the court to enjoin such a strike. The court must issue an injunction if it finds that the strike will significantly disrupt public transportation services and endanger public health, safety or welfare. The California law, however, carefully points out that nothing in this special emergency law "shall be construed to grant or deprive employees of a right to strike."38
If a strike is legal, can transit employers hire strike-breakers? In the 1930s shortly after the passage of the Wagner Act, the courts said the law did not allow employers to hire permanent striker replacements. A little more than three years after the passage of the Wagner Act, however, the U.S. Supreme Court in 1938 ruled that employers could hire permanent replacements for workers who were striking for economic reasons, as opposed to workers striking because of an unfair labor practice committed by the employer. Typically, such an unfair labor practice would be a clearly demonstrated failure of an employer to bargain in good faith with the union. Still, for more than four decades, employers used this right to hire permanent striker replacements very sparingly. Employers feared violence from striking workers walking the picket line, adverse reactions from pro-union consumers, unionized suppliers, the community, and even government intervention. President Reagan's firing of 11,500 illegally striking air traffic controllers in 1981 changed all that.
Air traffic controllers are federal employees, and federal employees do not have the legal right to strike. In the past, federal employees had struck many times anyway. President Reagan, effectively the CEO of all federal employees, took drastic action. When after a stern warning, even an ultimatum, the air traffic controllers' union continued the strike, Reagan ordered all strikers to be fired, and he immediately authorized the hiring of striker replacements. Employers all over the country followed his example. In addition, union power in this country had already started to decline, making political retaliation in case of striker replacements unlikely. At that time, plenty of cheaper non-union workers had become available because of wage stagnation. Employers like Greyhound, Eastern Airlines, and Caterpillar argued publicly that they were in dire financial straits, and privately they found it profitable to replace strikers with new hires who were promised permanent employment. The mere threat of permanently replacing strikers broke a five-month old month strike by UAW at Caterpillar in 1992. In 1988, International Paper Corporation reduced its workforce by 20 percent and abolished premium pay after replacing strikers permanently. Two years later, 80 percent of its workforce consisted of replacement workers.39 As was discussed regarding the two Greyhound strikes, Greyhound Lines followed a similar strike replacement strategy, but still went bankrupt.
Today the mere threat of permanently replacing striking workers with new hires has become a source of negotiating power for employers. Despite years of aggressive political lobbying, organized labor has been unsuccessful in trying to get legislation passed that would outlaw permanent strike replacements. Yet transit employers, whether private or public sector, still find it risky to adopt a permanent striker replacement strategy. In the first place, public opinion counts heavily in the transit industry, more so than in many others. Unions have become more and more skillful in influencing public opinion during a labor dispute. Profitable transit operation depends heavily on good community relations. Secondly, the hiring and training of new drivers, dispatchers, and maintenance mechanics is costly and filled with risks. Transit unions are quick to point out to the press that public safety has been endangered when a transit facility has put poorly trained new hires in jobs previously held by employees with many years of experience. Any preventable accident by a replacement bus or trolley driver is surely going to be blown out of proportion in a press interview with a transit union representative. It's smart politics. Management has a legal right to keep operating during an economic strike by hiring temporary or permanent striker replacements (See "Unfair Labor Practices Strike" below). The U.S. General Accounting Office states that in about one-third of strikes, employers announce that they would hire permanent replacements if striking employees do not return to work by certain date--and estimated that in about 17 percent of all strikes the employer actually did hire permanent replacements--and about four percent of striking workers were replaced. 40
There are risks for both employers and strikers when strike replacements are hired. For the replacement worker who is hired on a temporary basis during a strike it means that he or she will be out of a job again when the strikers go back to work after a settlement. If replacement strikers are hired with an implied or expressed promise of permanent employment and are let go again after a settlement with the union is reached, they may sue the employer for misrepresentation or breach of contract. Usually it is not easy to permanently replace all striking employees. During and after the strike, tensions between strikers and strike replacements may lead to violence and community disorder.
In 1993 Congress considered legislation introduced by the Democrats prohibiting the hiring of permanent striker replacements. The Democrats could not overcome the Republican opposition and the bill failed. In 1995, President Clinton tried to issue an executive order that would make employers who hire permanent strike replacements ineligible for federal contracts. It too failed after a U.S. Court of Appeals struck it down in February 1996 by saying that the Executive Order "undermines the National Labor Relations Act, under which, the courts have held, employers may permanently replace strikers."41
In Unfair Labor Practices Strikes, should the NLRB find that a strike was caused by an employer's unfair labor practice, such as a refusal to bargain in good faith, and the employer is found to be guilty the unfair practice, strikers may be entitled to reinstatement with back pay.
However, strikers engaging during the strike in illegal misconduct need not be reinstated; for example, strikers physically preventing other employees to enter the plant, jumping in front of moving cars or trucks, stalking non-striking employees, throwing rocks, eggs, and other disruptive misconduct. The main criterion defining illegal conduct is whether the action or misconduct coerced or intimidated non-strikers in the exercise of their legal rights.
A strike, or threat of a strike, plays a strong political role in the transit environment, much more so than in most other industries. Whether a transit worker strike is legal or illegal in a given state or locale is not the point. History shows that strike prohibitions do not eliminate strikes. A union leader who has been thrown in jail for violating a strike prohibition is twice as likely to win the next few union elections than one who doesn't have martyr status. More often than not, the threat of a strike is just as powerful a weapon as an actual strike. A strike, or threat of a strike, may actually place an important political tool in the hands of transit managers. Politically skilled transit managers in both the private and public sector know that a strike, threatened or real, may help them in their request to political bodies for additional funding or approval for fare increases. Barnum (1977) stated:
So even in those cases where the strike is illegal, the threat of a strike is seldom absent from the bargaining table. This fact has been confirmed by numerous interviews by this author.
In both privately and publicly owned transit companies, the strike is primarily a politico-economic weapon. That this is so in the public sector requires little elaboration. A public sector strike puts economic pressure on the voters who benefit from the service. The voters put political pressure on their elective representatives to settle the disputes. As the elected representatives generally have direct control over the transit system, or appoint its decision makers, they can take action to resolve the impasse.
When a strike occurs in a privately owned transit system, both economic and political pressures are placed on the private managers. The potential of lost profits exerts economic pressure. But by far the strongest pressure on management is politico-economic. Recall that a transit system can generally maintain a fair rate of return as long as fare increases are granted by the public utilities commission or city council. But these are public bodies, generally appointed by local or state politicians or directly elected. Hence they are susceptible to political pressure. And a transit strike typically arouses the citizens and results in pressures to end it.42
There are times when the political pressure of a strike threat takes more subtle forms. In private transit systems, a contract settlement between union and management may be conditional. The settlement may be tied to the transit system receiving financial assistance from a political body or approval for a fare increase. No experienced management negotiator would make such an offer to a union without having explored with the political body the likelihood of such requests being granted. Nor would he or she neglect to point out to the political body or political officials the consequences of denial of the request. No union negotiator would negotiate such a settlement without having made it clear that there would be a strike if the terms of the conditional settlement would not be met. In reality, what both parties may have done in cases like this is to buy some time for the political processes to be played out, without having to face a strike. That political process most likely would involve the union using its political power to influence political bodies and political officials to approve the request for fare increase or direct financial assistance to the transit system, among other things.43
Collective bargaining in publicly owned transit facilities takes place in a complex political environment. External political pressures from state, municipal, and county governments, as well as community interest groups, are enormous, and they often frustrate negotiators and other labor practitioners to no end. One public official said:
The Transit Authority pretty much gets its orders from the mayor's office, and it [the Transit Authority] tells the negotiators for the transit facility what they can and cannot do. There are so many issues that are "off-limits." For example, pension benefits may be governed by the state and can't be bargained over at the local level. The county government may tell you what you can negotiate in the way of employee health benefits, if your transit employees are county employees. The county government won't let you negotiate anything that's not in parity with other county employees. And the list goes on and on.44
Many public transit operations are subject to political pressures from at least three local sources. First, there is the Transit Authority, created by state- enabling legislation (to be discussed later). It is usually governed by a Transit Board, a Board of Directors, or a Board of Trustees. Its functions are usually spelled out by the enabling state legislation that created the transit district and its transit authority. Transit board members may be elected or appointed. Theoretically, its functions are similar to the Board of Directors of a private corporation. In practice, there is a world of difference because transit board members tend to be political appointees; they are put into office by politically oriented individuals or groups.
Transit board members may be appointed by the mayor of a city, city council, county board of supervisors, or other political body. A board typically exercises tight control over public transit operations, particularly budget matters, passenger fares, bus or train routes and schedules. In addition, many cities or metropolitan transit districts have so-called City Transit Commissions, Transportation Commissions, or Citizens Advisory Committee. They are even more political in nature. Members usually represent certain interest groups in the community. Typically the commission is supposed to provide advice to the Transit Board regarding the community's wants and needs.45 While it is not meant to interact directly with officials who run the transit operation, but merely give advice to the elected or appointed board, its influence on transit operations can be significant and often politically biased.
Finally, a special case is transit districts that are created by so-called "Joint Power Agreement." They are basically transit districts that cut across two or more transit authority jurisdictions and involve two or more local governments. This condition complicates the political implications of transit labor relations even further. A more detailed discussion of this aspect would go beyond the scope of this report.
Generally speaking, the management of public transit organizations tends to be rather traditional in their leadership style. In practice this means that management tends to be hierarchy-oriented and values stability more than change, tends to lean toward centralization more than decentralization of authority, and often lacks the flexibility needed to launch innovation labor relations programs.46
First-line supervisors often lack the leadership training needed to relate well to the people they supervise. According to a national survey, almost all supervisors of bus operators are promoted from the ranks of bus operators. It is practically the only promotional opportunity for the vast majority of transit bus operators without additional education or experience. Realistically, there is little in the job as bus operator that prepares them for the job of leading others. The system expects first-line supervisors to be control oriented, to enforce rules and punish non-compliance. Bus operators frequently complain that the only time they hear from their supervisor is when they are in trouble.47 These conditions make innovative labor relations practices and changes in leadership styles very difficult. Many transit organizations have recognized this and have in recent years initiated large-scale training programs for supervisors, emphasizing leadership skills and communications skills more than technical and administrative skills. The National Transit Institute, which offers a wide range of transit specific courses in these areas, has been of great help to many transit organizations that have been trying to fill this gap.48 Where transit organizations have successfully embraced interest-based bargaining and joint labor-management problem solving teams, these programs have almost always been accompanied by extensive leadership training at all levels, by efforts to change the organizational culture, and efforts to decentralize decision making and enhance employee empowerment.
Although there have been many exceptions, the transit industry has been slower than many others in forming labor-management partnerships in order to solve the economic problems on both sides. As we shall see in a later chapter on that topic, however, there have been dramatic success stories of union-management cooperation in transit.
Years ago, market competition in the transit industry was minimal. Starting in 1974, the Arab oil embargoes created severe gasoline shortages and increased gasoline prices, which impacted transit ridership substantially. Commuters and shoppers looked more and more toward transit systems for their transportation needs, particularly in cities where traffic congestion became an added problem. Transit ridership soared to the point where transit providers had a hard time keeping up with the demand for transportation. Transit ridership increased in 1973 for the first time, after 27 years of declining ridership. In many places, local politicians became friends of transit systems again. Buses became more modern and stylish. Customer service and transit marketing efforts improved.49 Environmentalists were pleased to see buses use alternative fuels to reduce air pollution. Ridership continued to grow even after the oil embargo was lifted. Light rail transit also made a strong comeback, particularly in California.50 Union-management contracts contained generous benefits for workers during this period. During the first half of the 1970s, wage levels in transit had increased 47 percent faster than the cost of living.51
All that has changed. In the last two decades or so, our nation's economy and workplaces have changed in response to ever increasing global competition, deregulation of major industries, rapid technological innovations, and the end of the Cold War. While transit industry competition may not be global, the threat of competition certainly exists. The competitive threats may take the form of privatization, competition for public funding, competition from other transit organizations, competition from para-transit, or other forms.
In the past, union and management have dealt with the economic issues largely through adversarial, even hostile, collective bargaining. Labor and management were in competition with each other. They competed over how big a slice of a fixed-size economic pie, or profits, each would get. Both were willing to endure a strike, if necessary. The old way worked for both sides, at least most of the time. It worked largely because the parties could take labor cost out of the competition. That has changed. Now labor cost is a bigger factor than ever for transit employers to remain financially solvent and for unions to protect the income and job security of their members. The old model, often called distributive bargaining, seems to be unable to deal with increasing competition, global or otherwise. The old model seemed to have been unable to adapt to the new economic environment.
A new model emerged--that of interest-based bargaining, or integrative bargaining.52 It is called interest-based because the parties focus on each other's interests and needs, rather than on positions. It is called integrative because each party integrates into its own goals and objectives the needs and problems of the other side and seeks to solve them in a mutual problem- solving approach. 53 When that process endures over time and expands into a wide range of non-economic interests and problems, we call it labor-management partnership. As we shall see in a later chapter, it has worked well for many private and public sector organizations and their unions. The thinking and organizational cultures of both union and employer have moved away from the idea of competing over the largest possible piece of a fixed pie, toward enlarging the pie through mutual effort, and thereby both sides benefiting from having a larger pie to share.
It appears that both approaches co-exist today, even though they are diametrically opposed. Both seem to work, at least for the time being. As a matter of fact, in many cases the same negotiators alternate between the two approaches.54 At the beginning of new contract negotiations, on the easier issues, they may genuinely collaborate with each other in a mutual problem-solving type of approach. Later on in the negotiations, when the parties have to face the harder economic issues, such as wage and benefit increases or shutting down a certain part of the operations, the negotiators may return to the old, traditional way of adversarial bargaining. When contract negotiations are concluded, they may again return to mutual problem solving in year-round labor-management committees. And in some cases one side or the other may decide that interest-bargaining was a failure and abandon the process. In our research we even encountered cases in which the parties abandoned the partnership only to go back to it again a year or two later, with or without a change in management or union leadership.
With this coexistence of the two processes in mind, John Calhoun Wells, the former director of the Federal Mediation and Conciliation Service, has come up with a new "transitional" model, which he calls "Conflictive Partnership."55 He believes that his model, at least for the time being, is a realistic alternative to the traditional, adversarial model of collective bargaining, and an equally realistic alternative to the cooperative model. He points out that in response to competitive pressures, labor-management relations have expanded into diametrically opposed directions. The traditional, adversarial approach is on one extreme end, and the cooperative approach is on the other. The cooperative model, he points out, requires trust, achieving common ground, information sharing, joint problem solving, risk taking, and innovation. But the amount of trust required is enormous; it must be slowly earned over time, and is very easily lost. He points out that there are distinct institutional differences between unions and management, and differences in interest, which will inevitably lead to conflict. But the two sides also have certain interests in common. Among them are mutual concerns for employee safety and health, income and job security for employees, quality of work life, and, of course, the bottom line--the financial stability of the employer. It is these shared interests that make labor-management partnerships possible.
Conflict need not destroy a cooperative relationship. On the contrary, conflict may make the parties work harder to find solutions to problems that affect both sides. Both sides need to respect the institutional differences between union and management, which inevitably create conflict over differences in interests. At the same time they need to develop and maintain a recognition of their common interests and find creative ways of mutual problem solving to meet these interests. Wells calls these interests "mutual self-interests." The most basic of these are "profits and jobs." Less obvious are safety and health, quality of work life, workforce education and training, quality of product and service, productivity, and customer satisfaction. As the parties experience success and mutual trust in putting these ideas to work, the basic question of "what's in it for me" becomes "what's in it for us." When the parties reach that point, they have achieved the shared vision, shared goals, and shared strategy needed for a successful labor-management partnership. That partnership must involve shared decision-making and willingness on both sides to "run the business together." That, of course, is the ideal labor-management partnership. We may never fully realize this ideal, but we can be successful in trying. Conflict, however, will always be there. It's not a question of how we can eliminate it, but how we deal with it.
There is no uniform labor law that governs the entire transit industry. The legal framework of labor relations in the transit industry is a hodgepodge of state and federal statutes, local ordinances, executive orders, and court decisions. Even the experts find it difficult to sort out the pieces. One huge problem is that the industry is split into private and public-sector enterprises, each with its own complicated and very diverse legal framework. While the private sector is not quite as complicated as the public sector, it is still difficult to get a handle on the many legal restrictions placed on the transit employer, and the legal protections afforded unions and employees in the private transit sector. The chapter on the history of transit labor relations and the chapter on the economic and political environment of transit labor relations shed some light on how these overlapping legal aspects of the industry evolved. The complicated legal framework developed over time was that small private transit companies found it impossible to compete with the private automobile and local, state, and federal government had to come to their rescue. More on this later in this chapter in our discussion of the "Memphis Formula" and "Section13(c) Collective Bargaining." To add to the complication, some states still prohibit collective bargaining for state and local government workers. In order to qualify for federal transit subsidies, they passed complicated state legislation to exempt transit workers from the prohibitions against other public sector employees in their state. It is interesting to note that these complicated legislative measures are in many cases precisely what drove transit unions and transit management into close cooperation in collective bargaining.
As was discussed in the history chapter, the earliest transit services were rendered by small private companies. Then, starting in the 1960s, the trend was for the small as well as the large private companies to be taken over by public transit authorities because they could not remain financially viable. Whether or not private transit is more efficient and cost effective has been discussed in the chapter "The Economic and Political Environment of Transit."
When a transit organization is in the private sector, its legal status is reasonably well known. Private-sector employers, employees, and unions are covered by the National Labor Relations Act, as amended.56 The original version of that law, popularly called the Wagner Act of 1935, only protected the collective bargaining rights of employees and their unions. It did not protect employers. It guaranteed private sector employees the right to self-determination through collective bargaining and prohibited employers from interfering with those rights. At the core of the Wagner Act were five unfair labor practices, or prohibitions, for employers, often simply called "ULPs."
To interfere with employees' rights to bargain collectively through unions of their own choosing.
To dominate the formation or administration of labor unions, by financial support or the creation of company unions. ("Company unions" are unions created by the employer, usually for the purpose of keeping out "legitimate" unions.)
To discriminate or retaliate against employees or job applicants because of union membership or union sympathy.
To discriminate against employees because they filed charges under this law.
To refuse to bargain collectively and in good faith with unions of their employees' choosing.
The Wagner Act also created a powerful federal agency, the National Labor Relations Board (NLRB), to interpret and enforce the law. The NLRB investigates alleged violations of these Unfair Labor Practices and may issue a cease and desist order if a complaint is found justified. Unless they choose to appeal the order in federal court, employers must obey the order. The NLRB normally does not have the power to impose fines or other penalties upon employers, except it may award back pay plus interest to employees who have suffered financial harm as the result of an employer's unfair labor practice. If an employer ignores a cease and desist order, the NLRB takes him to court. The cease and desist power of the NLRB should not be underestimated, however. It has given the board far more power than the ability to simply apply the law. It can interpret and reinterpret the law and thereby make public policy. New board members are appointed by the President of the United States with the advice and consent of the Senate.
A second major function of the NLRB is to conduct secret ballot elections to let employees decide whether they want collective bargaining and, if so, which union they want to serve as their exclusive bargaining representative. In past decades, these elections have resulted in widespread union organization and representation.57
One of the problems with these appeals, from a union point of view, is that while the employer appeals a NLRB unfair labor practice decision in court, the employer need not obey these cease-and-desist orders. Of course, each of these appeals is subject to a higher-level review by another court. The appeals process is so long that by the time it has been exhausted and the cease-and-desist order must be obeyed, most employees who are affected by it have already left the company or are retired.
As one can well imagine, the one-sidedness of the Wagner Act raised a storm of protests and years of aggressive lobbying efforts by employers. Employers were incensed that the Act spelled out illegal ULPs only for employers and not for unions. In other words, unions could resort to unfair practices like intimidation of employees in union organizing campaign, but employers could not. Nevertheless, the Wagner Act stood unamended for 12 years, until 1947. In the meantime, unions grew by leaps and bounds and gained enormously in power. Employers complained bitterly that the Wagner Act was an unfair, one-sided law. The very practices employers were prohibited to engage in could be pursued by unions freely and legally. It was illegal for employers to coerce or intimidate employees in their choice of unions and collective bargaining, but it was not illegal for unions to coerce employees into joining their ranks. It was illegal for employers to refuse or neglect to bargain in good faith, but unions could say "no" all day long.
By 1947 unions had become very strong, too strong in the eyes of the average citizen and the government. Unions had become so powerful that a whole industry could be shut down. After World War II, a wave of strikes hit the country. From the standpoint of an impassioned unionist, it was a normal development. During wartime, strikes are usually prohibited by law so as not to inhibit the war effort. Wages and benefits are frozen. The union leadership is anxious to appear patriotic and complies with the law. When the war is over, unions want to "catch up." They want to make up for the wage and benefit increases sacrificed during the war. Employers do not share this view and regard the new union demands as outrageous. Massive and widespread strikes become inevitable.
In addition to these circumstances, the 1946 election brought a relatively conservative Congress to power. It reflected the increasingly negative attitude of the public toward unions. As a result of all these factors, in 1947 Congress passed dramatic amendments to the 1935 National Labor Relations Act. The amendments turned out to be more voluminous than the original 1935 law. The amendments were therefore given the name of a separate law, the Labor-Management Relations Act, also known as the Taft-Hartley Act (named after its authors, Senator Robert Taft and Congressman Fred Hartley). Since the 1947 law incorporated all of the union protection provisions of the older 1935 law, lawyers and textbooks frequently regard the two laws as one, and simply refer to it as the National Labor Relations Act, as Amended.
The 1947 amendments sought to balance the power between labor and management by adding a number of unfair and prohibited practices of unions to the law. Among the major prohibited union practices are these:
Coercing employees into joining a union or interfering with their choice to be or not to be represented by a union for the purpose of collective bargaining. An exception to this is the "union shop" agreement in the collective bargaining contract to be discussed later.
Coercing employers to discriminate against employees because they refuse to join a union. Again the union shop agreement to be discussed later is an exception.
Interfering with the rights of employers to chose their own bargaining representatives. This prohibition includes attempts to force employers to bargain or not to bargain through an employers association, an outside law firm, or any member inside their own organization.
Refusal to bargain in good faith with employers. In practice this means unions, as well as employers, must demonstrate a willingness to reach agreement. They cannot present the other side with a "take it or leave it" ultimatum, but must demonstrate good faith by making alternate proposals and counter proposals.
Jurisdictional strikes by unions, meaning strikes to force an employer to assign certain jobs to members of one union instead of members of another union. This is a frequent tactic that was used in the construction trades.
Secondary boycotts, meaning boycotts against an employer not directly involved in a dispute with a particular union. As an example, a union refusing to let the employees it represents work on parts or products produced elsewhere by a non-union company or a by a company with whom another union has a dispute.
Featherbedding demands by unions, which are demands for pay for work not actually performed, or demands on employers to have employees perform unnecessary work.
Excessive or discriminatory union initiation and membership fees. The judgment of what is excessive or discriminatory is left to the NLRB.
In addition to these prohibited union practices, the Taft-Hartley Act imposed a number of restrictions on both parties in what they could include in the collective bargaining agreement. Among these restrictions are:
A ban on the closed shop agreement. Such an agreement is a negotiated contract clause in the collective bargaining contract, requiring employers to hire only union members. In other words, a job applicant has to be a union member before hire. In effect, employers surrender the hiring function to the union under this type of agreement. The union determines who gets admitted to union membership, hence the union controls hiring. The closed shop is not the same as a union shop agreement. The latter does not require union membership before hire but after hire, which is usually 30 days. The union shop is legal under federal law in the private sector, but often outlawed in the public sector. A very controversial section in the Taft-Hartley Act, however, makes it possible for individual state laws to outlaw the union shop even in the private sector within their borders. Such state laws prohibiting the union shop and other union security provisions in the union-management agreement are usually called "right-to-work laws," and states that have such laws on the books are referred to as "right-to-work states."
A second restriction on the content of collective bargaining agreements is concerned with dues check-off. It is a negotiated contract clause requiring employers to collect union dues through payroll deduction. Payroll deduction for union dues is now allowed only for those employees who have voluntarily signed a payroll authorization to that effect.
Another amendment of the National Labor Relations Act makes it possible for the federal government to invoke a "cooling-off period" when a strike threatens national health and safety. After satisfying certain procedural requirements, the President of the United States may request the Attorney General to seek an 80-day strike injunction in a U.S. district court. If granted, employees are required to return or continue to work for that period. In the meantime a variety of government-aided settlement attempts are launched. If a settlement has not been reached at the end of the 80-day period, unions are free to strike and employers free to lock out.
The original Wagner Act of 1935 excluded from its coverage all public employees (mostly government employees), airline and railroad employees, agricultural employees, and domestic employees. The Taft-Hartley Act of 1947 added supervisors to that list of exclusions.
As far as federal law is concerned, todays private sector transit employers, employees and their unions are still covered by the protections and prohibitions of the National Labor Relations Act, as amended, and fall under the jurisdiction of the NLRB. Keep in mind that other federal laws, such as ERISA, Title VII of the Civil Rights Act, and others, must also be considered. In addition they may also be subject to state legislation created specifically for the entire transit sector in the state or only for certain transit districts. For transit employers, employees and their unions who belong to the public sector, the legal environment is a different one.
When we talk of public sector employers and employees, we generally refer to those who work for federal, state and local governments, and also those who work for specially created districts, such as transit and water districts. There is no uniform, all inclusive labor law covering the entire public sector, as we have in the private sector. There is no equivalent of the National Labor Relations Act in the public sector. There is only a hodgepodge of separate state laws, local government ordinances, and a federal law governing only agencies and employees of the federal government.
Collective bargaining rights for public employees in this country came relatively late--much later than in most other developed nations. What hindered the development of collective bargaining legislation of any kind in this country was the so-called sovereignty doctrine to which public officials and other influential Americans subscribed to for many years. That doctrine basically said government is a sovereign ruler accountable only to the electorate and the legislature, which hold the ultimate power. Government cannot share that power with any special interest groups. Unions are considered to be special interest groups. Collective bargaining rights for public employees and their unions would mean sharing decision making with unions and thereby surrendering the sovereignty of government and violating public trust in government. A few states still subscribe to that philosophy and continue to prohibit collective bargaining for state and local government employees. The civil rights movement of the 1960s began to erode support for the sovereignty doctrine and the notion that government employees are citizens that ought to have the same rights as those in the private sector began to gain support.
In 1962 President Kennedy issued Executive Order 10988 which granted federal government employees and their unions permission to engage in a limited scope of collective bargaining with their respective federal agencies. President Kennedy's support of collective bargaining for government employees gave a tremendous impetus to states following the example of the federal government. State after state issued executive orders or passed legislation giving limited collective bargaining rights to certain groups of state and local government employees. The limits that were usually spelled out included a ban on the right to strike and a ban on the union shop.58
Since we do not have a single law or a single enforcement agency to govern public sector labor relations in this country, a consistent state and local government labor policy toward public sector bargaining does not exist. Some states even continue to prohibit collective bargaining in government, while in others virtually all civil service employees are in one bargaining unit. Most states forbid public employees to strike, but some permit strikes under certain conditions. Such extreme legal variations are in stark contrast to other industrialized nations, which tend to have a single national collective bargaining law for all public workers.59 Public policy toward labor-management relations is even more complicated in the public transit sector.
The so-called Memphis Formula is a clever device to bypass a state's legal restrictions on public sector collective bargaining by having public transit authorities contract out its transit services to a privately owned transit company. In the city of Memphis, Tennessee, bus service had been provided since 1896 by a private transit company called the Memphis Street Railway Company. But starting in the mid 1940s, that private transit company had experienced financial problems. By 1960, bus ridership and revenues had declined so much that the stockholders wanted to sell the company. One of the major factors in the company's inability to operate profitably was the constant refusal of the City Commission to approve fare increases.60 The restrictions and pressures that the two major investment companies who owned the Memphis Street Railway Company placed upon the company did not did not help its performance either. The city of Memphis, however, had great confidence in the management of the Memphis Street Railway Company, but realized that the transit system needed significant capital improvements, which the company could not afford. In addition, the city recognized that public ownership of the transit company would give it significant federal and state tax advantages.61 The more the city analyzed the situation, the more it became convinced that it could improve customer service and at the same time operate the transit system at a profit. In December 1960, Memphis finally purchased the private Memphis Street Railway Company, but retained its management and employees. The city negotiated a contract whereby the transit system would be run on a contract basis by the same management as before, as a private management company, but supported by public funds.
The city had confidence in the competence of the private sector management of the company and thought the officers could run the operation more efficiently without the restrictions the previous owners had put upon them. In addition, the old company management had a good relationship with the union. As a matter of fact, the local union, the Amalgamated Transit Union, urged the Memphis mayor to retain the old company on a contract basis to continue running the transit operations. And the city of Memphis did just that. The City Transportation Commission was glad to disassociate itself from the day-to-day problems of the transit system, including customer complaints about transit service, fares and routes. The old Board of Street Transportation Commissioners reorganized itself and became the Memphis Transit Authority. The new transit authority then hired the management of the previous company to form a new private management company to continue transit operations with the same personnel and the same union as before. But the city made sure that day-to-day transit operations, including labor relations, were kept out of the hands of the Transit Authority and out of city politics. The Transit Authority, however, retained close financial control over the management company and the right to formulate policy.
Had the city of Memphis chosen to have the Memphis Transit Authority oversee transit operations itself, the collective bargaining rights of its transit employees would have been voided because the Tennessee Supreme Court had ruled in 1958 that its cities, counties, or other public agencies would violate the states right-to-work laws if the city bargained collectively with a union. No wonder the Memphis local of the Amalgamated Transit Union pleaded with the mayor, the Transportation Commission, and anyone else who would listen to retain the services of the old private transit company after the public takeover. Indeed, this ingenious solution to the problem of preserving collective bargaining rights of private sector transit employees being taken over by public transit authorities in states which prohibit collective bargaining for public employees became a model for other states to follow and heavily influenced the U.S. Congress in drafting the labor provisions of the Urban Mass Transit Act of 1964.62
The NLRB and state and federal courts, however, questioned whether the Memphis Formula really placed the transit management companies, controlled by public transit or transportation authorities, in the private sector and therefore under the National Labor Relations Act. For some time, the NLRB struggled with the question of whether these new transit management companies really qualified as "employers" under the definition in the National Labor Relations Act. Keep in mind that the NLRA specifically excludes public entities from its coverage. In trying to answer this question, the NLRB and the courts asked how much independent control these companies really have over labor relations and working conditions, and to what degree they were controlled by their respective transit or transportation authorities. Eventually the view that these contracted management companies qualified as private employers under the NLRA and came under the jurisdiction of the NLRB prevailed, even though these private transit management companies may be subject to significant budgetary controls and policies set by public transit authorities. The degree to which public transit authorities exercise control over the labor relations policies and practices of the private management companies depends directly on a state's enabling legislation that creates these public transit authorities.
In transit, enabling state legislation means state legislation that creates transit or public utility districts and a certain funded public agency, usually a Transit Authority, is empowered to operate a transit system in its geographic area itself or hire or subcontract a private firm to do so. The labor relations portion of that piece of legislation commonly sets forth the collective bargaining rights and protections of employees who work directly or indirectly under the transit authority. Although there may be differences from state to state in the areas of unfair labor practices, and the right to strike, today these employee rights are often the same as the rights private-sector employees enjoy under the NLRA, as amended. But this has not always been so. Still, even in the early years, the labor provisions in the enabling state legislation have been different from what other non-transit public employees in the state had. Other public employees of the state or local government did not even have the right to form unions or seek collective bargaining.
At the time the city of Memphis took over the old Memphis Street Railway Company in 1960, it was already empowered by an old state law, Chapter 26 of the Tennessee Private Acts, to create the Memphis Transit Authority and to purchase or contract for a transit system which would be under the jurisdiction, control, and management of the Memphis Transit Authority. 63 The statute continues to spell out the powers of the Memphis Transit Authority if it chooses to contract with a private company to manage the transit system, directed and supervised by the Authority in all of its phases including the setting of rates, fares, and routes.î Memphis circumvented the statutory provisions by drafting contractual agreements with everybody concerned that gave the new Memphis Transit Management Company maximum independence from the Memphis Transit Authority. While the Transit Authority retained a certain control over financial matters, including the determination of bus fares and bus routes, the record shows that the Authority stayed away from labor relations and other personnel matters. The Management Company continued to bargain freely with the union, signed union-management contracts, hired and fired its own personnel, and even made capital purchases, such as buses, without approval from the city or the Transit Authority.64
Similar state-enabling legislation that created public transit authorities was passed as far back as the 1940s in other states when many private transit companies in the country, with their declining financial resources, could no longer meet the transportation demands of the rapidly expanding metropolitan areas. As implied, those early versions of state transit legislation tended to reflect the states collective bargaining policy that was radically different from those for other public employees working for the state or its local governments. We must remember that in those days almost all states forbade the rest of its government agencies to bargain collectively with public employees and public employee unions. It should be noted that most of the relatively pro-collective bargaining transit statutes passed by the states before 1964 were enacted by Eastern and Midwestern s