REPORT 

to 

THE PRESIDENT 

by 

EMERGENCY BOARD 

NO. 237 

SUBMITTED PURSUANT TO EXECUTIVE ORDER NO. 13334 

DATED APRIL 10, 2004 

AND SECTION 9a OF 

THE RAILWAY LABOR ACT, AS AMENDED 

_____ 

Investigation of disputes between Southeastern Pennsylvania Transportation Authority and the United 

Transportation Union 

(National Mediation Board Case No. A-13220) 

_____ 

WASHINGTON, D.C. 

MAY 11, 2004 
Washington, D.C. 

May 11, 2004 

The President 

The White House 

Washington, DC 20500 

Dear Mr. President: 

On April 12, 2004, pursuant to Section 9a of the Railway Labor Act, as amended, and by 

Executive Order 13334, you established an Emergency Board to investigate a dispute between the 

Southeastern Pennsylvania Transportation Authority and certain of its employees represented by 

the United Transportation Union. 

The Board now has the honor to submit its Report and Recommendations to you concerning an 

appropriate resolution of the dispute between the above-named parties. 

The Board acknowledges the invaluable assistance of Susanna C. Fisher and Cristina A. Bonaca, 

staff attorneys of the National Mediation Board, who rendered valuable aid to the Board 

throughout the proceedings. 

Respectfully Submitted, 

____________________________ 

Richard R. Kasher, Chairman 

_____________________________ 

Robert E. Peterson, Member 

_____________________________ 

David P. Twomey, Member 

2 
TABLE OF CONTENTS 

I. CREATION OF THE EMERGENCY BOARD ........................................................... 4 

II. PARTIES TO THE DISPUTE ...................................................................... 4 

A. The Carrier .................................................................................... 4 

B. The Organization ............................................................................ 5 

III. HISTORY OF THE DISPUTE ................................................................... 6 

IV. ACTIVITIES OF THE EMERGENCY BOARD ................................................ 8 

V. POSITIONS OF THE PARTIES ................................................................... 9 

A. Summary of the UTU’s Position .......................................................... 9 

B. Summary of SEPTA’s Position ........................................................... 9 

VI. RECOMMENDATIONS ............................................................................ 10 

A. Longevity Pay................................................................................. 13 

B. Wages.......................................................................................... 14 

C. Retroactivity................................................................................... 14 

D. Physician Verification of Illness............................................................ 15 

E. Medical Insurance Coverage................................................................ 15 

F. Conductor Seniority and Training.......................................................... 15 

G. Holidays........................................................................................ 16 

H. On the Job Training Allowance............................................................. 16 

I. Vacation Eligibility............................................................................ 16 

J. Short Term Disability Insurance Program................................................. 16 

K. Retiree Life Insurance......................................................................... 17 

VII. CONCLUSIONS ....................................................................................... 17 

APPENDIX A ................................................................................................... 19 

3 
I. CREATION OF THE EMERGENCY BOARD 

Presidential Emergency Board No. 237 (PEB or Board) was established by the 

President pursuant to Section 9a of the Railway Labor Act, as amended, 45 U.S.C. § 151 

et seq. including § 159a (RLA), and by Executive Order 13334 effective April 12, 2004. 

The Board was ordered to investigate and report its findings and recommendations 

regarding an unadjusted dispute between the Southeastern Pennsylvania Transportation 

Authority (SEPTA or Carrier) and certain of its employees represented by the United 

Transportation Union (UTU or Organization). A copy of the Executive Order is attached 

as Appendix A. 

On April 12, 2004, the President appointed Richard R. Kasher, an arbitrator from 

Villanova, Pennsylvania, as Chairman of the Board, and Robert E. Peterson, an arbitrator 

from Briarcliff Manor, New York, and David P. Twomey, an arbitrator from Quincy, 

Massachusetts, as Members. The National Mediation Board (NMB) appointed Susanna 

C. Fisher, Esq. and Cristina A. Bonaca, Esq., as Special Counsel to the Board. 

II. PARTIES TO THE DISPUTE 

A. The Carrier 

SEPTA is a regional transportation authority created by the Pennsylvania 

legislature in 1964 to provide mass transit service within the City of Philadelphia and the 

surrounding counties. Beginning in 1964, SEPTA absorbed the assets of numerous 

private companies operating bus and rail services in the Southeastern Pennsylvania area. 

Today, SEPTA is the fifth largest transportation system in the United States, providing 

approximately 298.4 million passenger trips a year. SEPTA serves the City of 

Philadelphia and Bucks, Chester, Delaware and Montgomery Counties. SEPTA’s 

operations are overseen by a fifteen-member Board of Directors, who are appointed by 

the Governor of Pennsylvania (1), the Pennsylvania Senate and House of Representatives 

(4), the City of Philadelphia (2), and Bucks, Chester, Delaware and Montgomery 

Counties (2 each). 

SEPTA provides transportation services in various modes, including bus, 

trackless trolley, subway, elevated, light rail, paratransit, shared-rides and commuter rail. 

In total, SEPTA operates and maintains 2,303 revenue vehicles on 195 routes covering 

approximately 1,918 route miles. SEPTA also operates and maintains 280 active stations 

and over 450 miles of track and related facilities. SEPTA employs a total of 

approximately 8,900 employees, of whom approximately 7,000 are represented by labor 

unions. Of SEPTA’s unionized employees, approximately 5,700 (or 81 percent) are 

transit employees who are not covered by the RLA. 

4 
SEPTA’s transit and rail operations are organized in a number of different 

divisions. The largest SEPTA division is the City Transit Division (CTD), which SEPTA 

has operated since 1968. The CTD comprises 84 bus routes, five trackless trolley routes, 

five trolley routes, and two subway lines, the majority of which operate within the City of 

Philadelphia. The CTD employs a total of approximately 6,000 employees, including 

both management and union personnel. 

SEPTA’s suburban operations are divided between two operating divisions, the 

Victory Division and the Frontier Division, which primarily provide bus and some light 

rail service in the suburban counties. 

The dispute before this Board involves SEPTA’s Regional Rail Division (RRD). 

The RRD serves the City of Philadelphia, and Bucks, Chester, Delaware and 

Montgomery Counties, and offers service to Newark, Wilmington, and Claymont, 

Delaware, and Trenton and West Trenton, New Jersey. The commuter rail services 

provided by the RRD were formerly provided by the commuter rail divisions of the Penn 

Central and Reading Railroads, and were operated by Conrail from 1976 through 1982. 

SEPTA acquired Conrail’s commuter operations in 1983. The RRD includes 13 separate 

train routes, and has approximately 1,763 employees, of whom approximately 1,300 are 

unionized. The RRD provided 28.1 million passenger trips in FY 2003, or nine percent 

of the total number of passenger trips system-wide. 

B. The Organization 

The UTU is a transportation labor union representing approximately 125,000 

active and retired railroad, bus, and mass transit workers in the United States and Canada. 

Membership is drawn primarily from the operating crafts in the railroad industry 

and includes conductors, brakemen, switchmen, ground service personnel, locomotive 

engineers, hostlers, and workers in associated crafts. More than 1,800 railroad 

yardmasters also are represented by the UTU. The UTU's 8,000 bus and transit members 

include drivers, mechanics, and employees in related occupations. 

The dispute before this Board involves approximately 365 Conductors and 

Assistant Conductors. 

5 
III. HISTORY OF THE DISPUTE 

On February 12, 2002, the UTU, pursuant to Section 6 of the RLA, served on 

SEPTA a notice to amend their collective bargaining agreement with the Carrier 

pertaining to changes in rates of pay, rules, and working conditions. Among other 

things, this notice requested three consecutive annual wage increases of ten percent. This 

proposal also included a request for longevity pay effective July 2002 and July 2003 for 

certain employees. 

The parties were not able to resolve these and several other issues, or certain 

counter proposals advanced by SEPTA. In June 2002, the UTU filed a request for 

mediation with the NMB. The NMB docketed the mediation case on June 24, 2002. 

After a year and a half of mediation sessions, the NMB, on December 4, 2003, in 

accordance with Section 5, First, of the RLA, urged SEPTA and the UTU to enter into an 

agreement to submit its collective bargaining dispute to arbitration as provided in Section 

8 of the RLA (“proffer of arbitration”). The UTU unconditionally accepted the NMB’s 

proffer of arbitration on December 13, 2003. On January 15, 2004, SEPTA advised the 

NMB that it would conditionally accept the NMB’s proffer of arbitration. 

On January 22, 2004, the NMB requested that SEPTA provide “unconditional 

acceptance or rejection” of the proffer of arbitration. SEPTA responded on January 26, 

2004, stating: “SEPTA is not in a position to unconditionally accept the Board’s [NMB] 

proffer of arbitration and submit all aspects of the dispute between SEPTA and the 

United Transportation Union to arbitration without any limitation on the arbitrator’s 

authority.” 

On January 30, 2004, the NMB notified the parties that it considered “SEPTA’s 

failure to provide an unconditional response to the Board’s [NMB] proffer to be a 

rejection.” 

On March 12, 2004, the NMB advised the parties that it was the judgment of the 

NMB that “all practical methods provided in the RLA adjusting the dispute have been 

exhausted.” The NMB stated that its services (except as provided in Section 155, Third 

and in Sections 159a and 160 of the RLA) were terminated under the provisions of 

Section 5, First, of the RLA. Accordingly, self-help became available at 12:01 a.m. EDT 

on April 12, 2004. 

On March 25, 2004, in accordance with Section 9a of the RLA, SEPTA requested 

that the President establish a PEB to investigate and issue a report and recommendations 

regarding the dispute. Section 9a(c)(1) of the RLA provides that any party to the dispute, 

or the Governor of any State through which the service that is the subject of the dispute is 

operated, may request the President to establish an Emergency Board. Upon the request, 

6 
the President shall create an Emergency Board. Therefore, on April 10, 2004, the 

President created this Emergency Board, effective April 12, 2004. 

With the single exception of its Rail Division Conductor and Assistant Conductor 

employees represented by UTU Local 61, collective bargaining agreements have been 

entered into by SEPTA and its employees represented by all other unions. These other 

agreements have been ratified by the individual union memberships and the SEPTA 

Board. 

On June 19, 2003, SEPTA presented the UTU with a draft memorandum of 

agreement for the proposed settlement of issues in the negotiations involving Conductors 

and Assistant Conductors. The draft agreement closely follows the wage increase pattern 

principle of settlements adopted by the other unions, and, with certain major exceptions, 

the agreement adopted by SEPTA’s Rail Division Engineers represented by the 

Brotherhood of Locomotive Engineers (BLE). 

The June 19, 2003 SEPTA proposal to the UTU provided for three separate basic 

wage increases over the term of the contract. The wage increases cover a differing three 

year period of time from the years contained in agreements adopted by the other unions, 

and, in particular the agreement between SEPTA and the BLE. 

The BLE agreement provides for five separate increases, with the first two wage 

increases being in the same amount previously contracted for by the UTU, namely, three 

percent effective July 1, 2001, and three percent effective July 7, 2002. The remaining 

wage increases contained in the BLE agreement are: 

3 percent effective July 6, 2003 

3 percent effective July 4, 2004 

3 percent effective July 3, 2005 

The June 19, 2003 SEPTA wage proposal to the UTU was as follows: 

3 percent on January 4, 2004 

3 percent on January 2, 2005 

4 percent on January 1, 2006 

Insofar as the longevity issue is concerned, the BLE agreement reads as follows: 

Effective July 11, 2004, all Engineers with ten more years of seniority will 

receive a $1.00 increase in the hourly rate. Thereafter, all other Engineers 

will receive said increase on their ten year anniversary. 

7 
Effective July 10, 2005, all Engineers with 15 or more years of seniority 

will receive a $1.00 increase in the hourly rate. Thereafter, all other 

Engineers will receive said increase on their 15 year anniversary. 

The SEPTA proposal of June 19, 2003 to the UTU included language regarding 

longevity pay. This longevity pay proposal differed materially from longevity pay for the 

BLE as it was based upon a UTU member achieving 15 years of service and then 

providing that employee with a $1500 lump sum payment for the first pay period in each 

January for the life of that particular contract. The lump sum payment would not be 

added to the base rate of pay for Conductors and Assistant Conductors. The proposed 

contract language read: 

Effective upon ratification, for the life of this contract, the first pay period 

of January each employee who has 15 years of service shall receive a 

$1500 lump sum longevity payment (not added to the base pay rate). 

At the hearing before the Board on April 28, 2004, SEPTA placed into the record 

a proposed memorandum of agreement that differed materially from that presented to the 

UTU on June 19, 2003. This proposed memorandum of agreement provides increases in 

rates of pay as follows: 

3 percent upon ratification by the parties 

3 percent on July 4, 2004 

4 percent on July 3, 2005 

Although, as stated above, the proposal SEPTA presented to the UTU on June 19, 

2003 included provisions for lump sum payments, the SEPTA proposal that was made a 

part of the record at the April 28, 2004 hearing contains no provision for longevity pay. 

IV. ACTIVITIES OF THE EMERGENCY BOARD 

An organizational telephone conference was held by the Board with the parties on 

April 15, 2004. Procedural issues were discussed, and a schedule of hearings was 

determined. Pursuant to that schedule, both parties provided the Board with pre-hearing 

submissions on April 23, 2004. A hearing was held on April 28, 2004 in Philadelphia, 

Pennsylvania. The Board held executive sessions with the parties on April 29, 2004 in 

Philadelphia. The Board met in executive session in Philadelphia on May 4 and 5, 2004, 

and in Washington, DC on May 7 and 8, 2004, to consider the dispute and prepare its 

Report. Both parties were provided with a full and fair opportunity to present testimony, 

documentary evidence and argument in support of their respective positions. 

8 
V. POSITIONS OF THE PARTIES 

A. Summary of the UTU’s Position 

The UTU contends that since Engineers, Conductors, and Assistant Conductors 

work together as members of train crews on SEPTA, it is essential that Conductors and 

Assistant Conductors represented by the UTU and Engineers represented by the BLE 

work cooperatively to run the trains safely and efficiently, and that the longevity pay 

pattern applicable to Engineers apply as well to Conductors and Assistant Conductors. 

According to the UTU, SEPTA has never adequately explained why the Carrier should be 

exempt from the local pattern of longevity pay for its RRD operating employees or why a 

deviation is justified. The Organization argues that SEPTA’s assertions about the need 

for longevity pay to retain Engineers do not bear analysis because attrition rates for 

Engineers and Conductors are not significantly different. The UTU contends that 

because of the interdependence of train crew members - - Engineers, Conductors, and 

Assistant Conductors - - no other SEPTA union can demonstrate entitlement to longevity 

pay. The UTU points out that the Rail Division generates 28 percent of SEPTA’s 

income, but incurs just 24.7 percent of expenses; and that the total cost of longevity pay 

is hardly prohibitive. 

Additionally, the UTU proposed certain other changes in the parties’ collective 

bargaining agreement, which proposed changes the Board will address in the 

Recommendations section of this Report. 

B. Summary of SEPTA’s Position 

SEPTA states that its proposal to the UTU is based on the pattern established by 

its agreement with the Transport Workers Union of America, Local 234, (TWU), its 

largest and most powerful union. SEPTA argues that a party seeking an exception to the 

pattern bears a heavy burden, and must demonstrate special and compelling 

circumstances. The Carrier states that it agreed to longevity pay in its agreement with the 

BLE because of compelling reasons associated with Engineer attrition. The Carrier states 

that voluntary attrition rates for Conductors is less than 1.1 percent and the pay for 

Conductors is more than competitive in the Philadelphia market. The Carrier asserts that 

the UTU has not met its burden in this case. SEPTA rejects the notion of a separate 

pattern for “operating crafts” covered by the RLA. 

SEPTA points out that in early 2005, it will negotiate its next agreement with 

TWU, Local 234, having persuaded TWU to accept a one-year agreement with a zero 

percent increase to base wages and a lump sum payment. SEPTA argues that if it were to 

grant longevity pay for Conductors in addition to the three percent, three percent, four 

percent TWU pattern, it would make bargaining nearly impossible with TWU, damage 

9 
SEPTA’s finances, imperil its ability to obtain funding from the Pennsylvania legislature, 

and lead its other unions to seek longevity pay. 

Additionally, SEPTA proposed certain other changes in the parties’ collective 

bargaining agreement, which proposed changes the Board will address in the 

Recommendations section of this Report. 

VI. RECOMMENDATIONS 

Before addressing the specific matters in dispute, the Board recognizes the 

budgetary constraints and uncertainty of funding that SEPTA submits it faces for the 

operation of commuter services. SEPTA’s Chief Financial Officer/Treasurer and its 

Senior Director of Budgets provided the Board with informative documentation 

concerning what they say is an immediate budget crisis and a long-term financial 

challenge. Particular emphasis was directed to the fact that SEPTA funding comes from 

a variety of sources. In addition to passenger revenues, appropriations and subsidies 

come from the General Assembly of the Commonwealth of Pennsylvania, the City of 

Philadelphia, and the four suburban counties surrounding the City of Philadelphia 

(Bucks, Chester, Delaware and Montgomery). The Board understands these financial 

constraints. 

As previously noted the RRD, which is serviced by the employees involved in this 

dispute, serves the City of Philadelphia and the four counties mentioned, and also 

provides transportation services as far north as Trenton and West Trenton, New Jersey, 

and as far south as Newark, Delaware. Rail transportation services in these areas came to 

be a part of SEPTA in 1983, when it assumed operations over the rail lines which had 

formerly been operated by several rail carriers and their successors, namely, Penn 

Central, Reading Railroad, and Conrail. 

The Board further notes that SEPTA calculated its labor costs as representing 46.8 

percent of its operating budget, with fringe benefits for health and welfare representing 

another 22.7 percent of its overall budget. It was said that the CTD is the largest 

component of the operating budget at 66.4 percent, with the RRD being 24.7 percent. 

The CTD was said to contribute the largest share of passenger revenue, at 66.2 percent, 

with the RRD providing 28 percent. 

It thus appears that the RRD contributes 28 percent of all revenues, or 3.3 percent 

more than its budgeted operating costs, whereas the transit divisions have a negative 0.2 

operating cost as compared with revenue income. 

The Board recognizes the historical wage and working relationship between 

railroad Engineers and Conductors. Engineers and Conductors are members of unions 

10 
that have historically been recognized as constituting the “operating” employees; that is, 

those employees responsible for work that is directly connected with the operation of 

trains. Other railroad employees are classified as “non-operating” employees. They 

perform work associated with such functions as the repair and maintenance of engines 

and rail cars, track maintenance, signal systems, station and clerical work. 

Almost since the inception of collective bargaining in the railroad industry, 

Engineers and Conductors, employees in the operating group, have generally had a wage 

relationship with each other. Increases in basic rates of pay have generally followed 

carefully woven patterns because of the operating rules’ requirement that Engineers and 

Conductors work together to affect a safe and efficient performance of their respective 

and intertwining duties. 

Engineers and Conductors perform their assigned duties subject to the same 

operating rules, regulations and practices, and the same safety rules. The performance of 

their work is subject to numerous federal statutes, rules, regulations and guidelines. Both 

must understand bulletins and special orders concerning the operation of their trains, and 

also know the physical characteristics of the routes over which their train assignments 

traverse. Both Engineers and Conductors are subject to and must pass periodic physical 

and book off rules examinations to remain in active service. Although the Conductor is 

generally designated as the operating train crew member in charge of the train, he or she 

works closely with the Engineers to assure that their train operates according to specific 

time intervals set for arrivals and departures from passenger stations. The assignments 

for which they bid and are awarded pair Engineers and Conductors for established 

periods of time. 

SEPTA’s training schedules for Conductors and Engineers indicate that it takes 

126 days to train a Conductor and 157 days to train an Engineer, with most of the time 

being spent in like training activities. Differences involve Engineers being given 20 days 

on a training unit and 15 more days than Conductors in on-the-job training. Conductors 

are given five days of additional equipment training and a revenue refresher course that is 

not provided to Engineers. 

There are, of course, certain differences between the job of an Engineer and a 

Conductor. It is arguable whether one or the other of their jobs is the more demanding. 

An Engineer is statutorily required to become and remain certified so as to remain 

in active service. Certification is unique to Engineers, and numerous collective 

bargaining agreements throughout the railroad industry provide a special monetary 

allowance for such certification. In operating from a locomotive engine or a motorized 

rail car, an Engineer must constantly be alert to such matters as the authorized speed of 

the train, signal indications, track roadbed conditions, and obstructions that may suddenly 

appear along the right of way. The Engineer also has the responsibility of stopping and 

11 
moving a train at passenger stations in a safe and smooth manner so as to not cause injury 

to passengers or members of the train crew. 

On the other hand, Conductors must assure that passengers entrain and detrain in 

a safe manner, opening and closing, as necessary, trap doors to steps that lead to station 

platforms where there is no high level platform. The performance of this and other job 

functions often require Conductors to leave a passenger car to stand on a station platform 

in the best and worst of climatic conditions. After assuring that passengers are clear of 

the train, it is the responsibility of the Conductor to signal the Engineer that it is safe for 

the train to leave a stopped position. En route, the Conductor has a responsibility to 

assure that a revenue fare has been paid or is collected. This requires that the Conductor 

know and enforce ticket revenue rules and procedures, check monthly commutation 

tickets, hole punch multiple ride tickets, and collect cash fares from passengers who had 

not previously purchased a ticket whether it be for a short distance of a stop or two or to 

the end of the run. 

Conductors also have the duty of being alert to assistance needed by passengers in 

frail health or with certain disabilities, to handle emergencies, and to look out for the 

safety and well being of passengers. 

Whereas the Engineer ordinarily remains in the cab of a locomotive engine or the 

compartment of a rail car for the duration of the over the road trip, the Conductor must 

walk the cars of the train to collect transportation; respond to inquiries of passengers with 

polite diplomacy pertaining to, among other things, the reason for any operating 

irregularities or service disruptions; and assure that passengers are not riding past their 

fare destination. The Conductor also has the duty to provide announcements of station 

stops. At the end of a run, the Engineer departs the train. Meantime, it is the 

responsibility of the Conductor to check for passengers who may have fallen asleep and 

forgotten to get off the train, check for personal property left behind, and prepare an 

accounting report of fares and collections. 

The Board now turns its attention to the specific issues in dispute. 

12 
A. Longevity Pay 

As set forth previously, almost since the inception of collective bargaining in the 

railroad industry, employees in the operating group have generally had a wage 

relationship with each other; and increases in rates of pay have generally followed 

carefully woven patterns. SEPTA has recognized this historic relationship.1 

In recognition of the interdependence of train crew members in commuter rail 

operations, their assignments are bulletined as one job. The Conductor is the operating 

crew member with the responsibility of being in charge of the train, while the Engineer 

has the responsibility of operating the passenger train in a safe and smooth manner. In a 

past round of bargaining a basis existed for the Carrier to provide a certification 

allowance only to Engineers as such a certification is unique to this craft and is required 

for each Engineer to remain in active service; and the Carrier initiated and then ended a 

special “pay for performance” allowance only for Engineers in past rounds of bargaining. 

Weighing the common training, the interwoven responsibilities, and common 

work and safety rules applicable to both Engineers and Conductors, the Board believes a 

compelling reason exists for recommending longevity pay for Conductors with ten and 15 

years of service with the Carrier. While Engineers will receive $1.00 per hour as 

longevity pay, the Board recommends that Conductors be granted 92 cents per hour 

longevity pay. The 92 cents would be paid to Conductors only, first when such 

Conductors have achieved ten years of seniority, and an additional 92 cents of longevity 

pay would be payable when such Conductors achieve 15 years of seniority. It is 

recommended that these longevity increments be made effective July 11, 2004 for 

Conductors with ten or more years of seniority. Thereafter, all other Conductors will 

receive such increase on their ten year anniversary. On July 10, 2005, all Conductors 

with 15 or more years of seniority will receive a 92 cent increase in the hourly rate. 

Thereafter, all other Conductors will receive said increase on their 15 year anniversary. 

The 92 cents, rather than $1.00 payments, represents the Board’s understanding of the 

approximate wage differential that currently exists between Engineers and Conductors in 

1 When the UTU negotiated their last contract as of July 30, 2000, the Carrier gave the UTU 

General Chairman a “me too” letter which stated: 

This will confirm our understanding that during the three-year term of this 

Agreement (July 14, 1999 through July 14, 2002), employees covered thereto 

shall receive percentage salaries and/or lump sum payments equal to the 

employees represented by the Brotherhood of Locomotive Engineers. 

The Board believes that this letter shows that the Carrier expressed a commitment to the UTU to 

continue the wage relationship of the UTU with the BLE; and the UTU obviously carefully 

sought to continue the wage pattern with the BLE for the three year duration applicable to all of 

the Carrier’s collective bargaining agreements for the round of bargaining in question. 

13 
their respective basic hourly rates of pay. The Board does not recommend longevity pay 

for Assistant Conductors. 

The Board has reviewed all of the attrition data available regarding Engineers and 

Conductors for the period of time immediately preceding both the UTU and BLE 

agreements, including 1998, 1999, and the year 2000 up to the signing of the respective 

agreements in that year. Considering the wealth of experience derived from working 

together as a crew in commuter rail service for ten years and 15 years an allowance to 

reward and retain both Engineers and Conductors is appropriate. To recognize one craft 

and not the other would surely fracture the work and pay harmony interwoven between 

these two groups. 

The Carrier perceives an adverse impact on its bargaining with TWU Local 234 

for a March 2005 contract if the UTU Conductors receive the longevity pay in question. 

TWU Local 234 is in fact the largest and most powerful union dealing with SEPTA. The 

Philadelphia community acclaimed the settlement worked out in negotiations led by the 

General Manager of SEPTA and the President of the TWU, which avoided a strike in 

March 2004. With a four percent wage increase for TWU members effective in 

December 2003, some four months prior to the expiration of their agreement, these astute 

parties gave themselves time to study the complex issues related to medical insurance by 

agreeing to a lump sum payment of $1000 in August 2004 and the continuation of fully 

paid medical insurance through March 2005. Surely, regarding the longevity pay issue 

before this Board, these sophisticated parties, SEPTA and the TWU, in their future 

negotiations will recognize that this Board dealt with this issue strictly limited to the two 

operating crafts that form each train crew for regional rail service. Indeed, the Board 

believes no other RLA craft or class, or any classification of transit employees has the 

commonality of work rules, training and interests culminating in the formation of single 

train crews and requiring the continuation of a harmony of pay rules in the interest of 

efficient service to the public. 

B. Wages 

The Board recommends the following increases to the wage schedule: 

3 percent effective on ratification 

3 percent effective July 4, 2004 

4 percent effective July 3, 2005 

C. Retroactivity 

SEPTA states that its refusal to agree to a retroactive wage increase is a key 

component of its long-established labor relations strategy. By refusing to grant increases 

retroactively, SEPTA maintains it encourages good faith negotiations and prompt 

14 
resolution of disputes, and discourages unions from holding out for more favorable 

treatment. 

The UTU maintains that the wage increases be made retroactive because of what 

it says was the position of SEPTA in refusing to bargain on the issue of longevity, 

thereby unnecessarily protracting negotiations. 

The Board recommends that there be no retroactive wage increase considering the 

totality of the facts and circumstances before the Board as of the date of this Report. 

D. Physician Verification of Illness 

Provisions of the current SEPTA/UTU Agreement prescribe that an employee 

who marks off sick is required to present a verification of sickness or illness for absences 

of three or more days. The UTU requests that this time period be expanded to five days. 

The record before the Board does not contain sufficient evidence to support the 

UTU’s proposal. The Board, therefore, recommends that the UTU proposal be 

withdrawn. 

E. Medical Insurance Coverage 

The Board has not been presented with sufficient probative data to recommend 

that the UTU contract be singled out for a modification of benefits with regard to persons 

who are not yet employed by SEPTA. Therefore, the Board recommends that the SEPTA 

proposal be withdrawn. 

F. Conductor Seniority and Training 

The UTU seeks a contract provision to provide that when a junior Conductor not 

holding a Conductor’s position is force-assigned to a lower paying Conductor’s position 

that the force-assigned employee be compensated the greater of the daily earnings 

between the two positions. The UTU argues that the force-assignment of employees to 

Conductor positions is a consequence of there being an insufficient number of qualified 

Conductors to cover SEPTA’s commuter train service. 

SEPTA maintains that it has addressed the UTU concern by reason of having 

trained an additional 58 full Conductors, a number it believes is sufficient to address any 

alleged concern about Conductors not being able to pick assignments that can be 

performed by Assistant Conductors. 

The Board is satisfied that SEPTA has made a good faith effort to address the 

UTU concern and, therefore, finds no reason to recommend a penalty provision in the 

agreement. 

15 
G. Holidays 

The UTU has proposed that all holidays be handled in the same manner as Martin 

Luther King Day, Presidents’ Day, and Good Friday as reflected in Section 601(f) of the 

parties’ agreement. That is, if a paid holiday occurs while an employee is on vacation, 

the employee has the option of taking holiday pay or a floating holiday. 

The Board recommends adoption of this UTU proposal. 

H. On the Job Training Allowance 

Current rules of the collective bargaining agreement provide that Conductors who 

act as instructors for employees being trained for Assistant Conductor positions receive a 

50 cent per hour on-the-job training allowance. 

The Board recommends that this training allowance payment practice be codified 

and incorporated in the written agreement. 

I. Vacation Eligibility 

The current UTU Agreement requires that employees hired on or after January 1, 

1983 must work at least 195 days (including vacation days) to be eligible for vacation in 

the following year. The UTU has proposed that the number of days be reduced to 120 

days (excluding vacation). 

The Board recommends that the UTU proposal be withdrawn. 

J. Short Term Disability Insurance Program 

SEPTA submits that the BLE gave up certain itemized cost elements of its 

agreement to offset the cost of this benefit, a fixed cost of $20.65 per month, per member. 

The Board recommends that, if the UTU continues to seek a Short Term 

Disability Insurance Program, the Organization engage in conferences with SEPTA 

concerning the manner by which the cost of such program may be offset. 

16 
K. Retiree Life Insurance 

The current agreement between the UTU and SEPTA provides retirees with a 

$2,000 life insurance policy. 

The most recently negotiated SEPTA/BLE Agreement includes a provision 

covering retiree life insurance that reads as follows: 

Retiree Life Insurance: In Section 806, amount to increase coverage (to 

$10,000) for any employee retiring during the term of the Labor 

Agreement. 

The Board recommends that SEPTA agree to the UTU’s proposal to increase 

retiree life insurance coverage to $10,000 for any employee retiring during the term of 

the agreement. 

VII. CONCLUSIONS 

The above recommendations address all of the open issues which the Board has 

deemed necessary for resolution. The Board recommends that any other proposals, not 

specifically addressed above, be withdrawn. 

It should be abundantly clear in reading the above findings and observations that 

the Board respects, and its individual members have in other PEB proceedings and 

elsewhere adhered to, the principle of pattern bargaining and settlements. 

The Board’s recommendation that longevity pay be extended to UTU Conductors 

is premised upon the unique character of the “crew” relationship between Engineers and 

Conductors. 

It is the Board’s earnest hope, in keeping with the intent of Section 9a(c)(1) of the 

RLA, that the parties will now enter into a collective bargaining agreement based on the 

recommendations that we have set forth in our Report. 

17 
 Respectfully Submitted, 

___________________________ 

Richard R. Kasher, Chairman 

___________________________ 

Robert E. Peterson, Member 

___________________________ 

David P. Twomey, Member 

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- - - - - - - 

APPENDIX A 

THE WHITE HOUSE 

Office of the Press Secretary 

(Crawford, Texas) 

______________________________________________________________________________ 

For Immediate Release April 10, 2004 

EXECUTIVE ORDER 

ESTABLISHING AN EMERGENCY BOARD TO INVESTIGATE A DISPUTE 

BETWEEN THE SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY 

AND ITS CONDUCTORS REPRESENTED BY THE UNITED TRANSPORTATION UNION 

A dispute exists between the Southeastern Pennsylvania Transportation Authority, and its conductors 

represented by the United Transportation Union. 

The dispute has not heretofore been adjusted under the provisions of the Railway Labor Act, as 

amended, 45 U.S.C. 151-188 (the "Act"). 

A party empowered by the Act has requested that the President establish an emergency board pursuant 

to section 9A of the Act (45 U.S.C. 159a). 

Section 9A(c) of the Act provides that the President, upon such request, shall appoint an emergency 

board to investigate and report on the dispute. 

NOW, THEREFORE, by the authority vested in me as President by the Constitution and the laws of the 

United States, including section 9A of the Act, it is hereby ordered as follows: 

Section 1. Establishment of Emergency Board ("Board"). There is established, effective April 12, 

2004, a Board of three members to be appointed by the President to investigate and report on this 

dispute. No member shall be pecuniarily or otherwise interested in any organization of railroad 

employees or any carrier. The Board shall perform its functions subject to the availability of funds. 

Sec. 2. Report. The Board shall report to the President with respect to this dispute within 30 days of its 

creation. 

Sec. 3. Maintaining Conditions. As provided by section 9A(c) of the Act, from the date of the creation 

of the Board and for 120 days thereafter, no change in the conditions out of which the dispute arose shall 

be made by the parties to the controversy, except by agreement of the parties. 

19 
Sec. 4. Records Maintenance. The records and files of the Board are records of the Office of the 

President and upon the Board's termination shall be maintained in the physical custody of the National 

Mediation Board. 

Sec. 5. Expiration. The Board shall terminate upon the submission of the report provided for in 

section 2 of this order. 

GEORGE W. BUSH 

THE WHITE HOUSE, 

April 10, 2004. 

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