'Great Train Robbery,' Or an Inside Job?

Contrary to the howls emanating from Mayor Bloomberg and Acting Metropolitan Transportation Authority Chairman Helena Williams, last week's Transport Workers Union Local 100 award was not, as a Daily News editorial dubbed it, "The Great Train Robbery."

Local 100, which is usually more inclined toward that kind of hyperbole, was much closer to the mark in characterizing it as "a fair settlement" that in the current economic situation was "the best settlement possible" for union members.

And if the contrasting reactions of the affected parties make it sound like at least a bit of a heist, it would have to be considered an inside job. Because to the extent that arbitration panel chairman John Zuccotti— who first earned his formidable reputation as the Deputy Mayor who helped pull the city back from the edge of bankruptcy in the mid- 1970s—leaned toward the union's case, he seems to have done so with a gentle shove in that direction from the prior MTA management.

A Mission From Spitzer

That former regime, led by ex-CEO Lee Sander, was ready to reach a deal providing three 4-percent raises last October before Mr. Bloomberg interceded, objecting that the final raise was more generous than what the city was contemplating giving its unions in upcoming wage talks considering the shaky economy both here and nationally.

THE UNUSUAL SUSPECTS: While Mayor Bloomberg blasted the contract award for Transport Workers Union Local 100 as excessive, his agreeing to similar terms with city unions and what some believe were clear indications by now-departed Metropolitan Transportation Authority CEO Lee Sander (right) that the agency could cover the costs figured prominently in the decision.

Mr. Sander was appointed to the job by then-Gov. Eliot Spitzer, who while campaigning in 2006 had stressed the need to improve labor-management relations in the city transit system. When Howard Roberts was tapped as president of New York City Transit, it was noted that in a previous stint at the agency he had enjoyed a good relationship with the union.

Perhaps just as importantly, Mr. Sander early on kicked Gary Dellaverson, who for more than 15 years had been the MTA's Labor Relations Director, upstairs to the position of Chief Financial Officer. During two previous contract negotiations, Mr. Dellaverson's toughness at the bargaining table had clashed with Local 100 President Roger Toussaint's, creating a strong mutual dislike. Moving him out of the job to a position of higher responsibility was widely viewed as another offering to the union president.

The efforts by Mr. Sander to make nice with the truculent union leader created something of a paradox. Because of the penalties it incurred from the 2005 strike, Local 100 was weakened internally and lacked the leverage it usually carried into negotiations in the form of a credible threat of a walkout. The MTA, in addition to that advantage, had major financial problems looming that at one point led it to threaten drastic cuts in personnel and service. Yet in a situation where ordinarily it would have been expected to translate those factors into a hard line at the bargaining table, Mr. Sander took a morereasonable approach.

It's unlikely that this is what led Governor Paterson to oust him this spring; despite his tougher line on labor issues in recent months, he is generally sympathetic to unions, and Local 100 would figure to be one he would be kindly disposed toward even if his father were not its outside bargaining counsel.

Lifting the 'Tax' on Overtime

But there was a marked change, judging by Mr. Zuccotti's decision, in the MTA positions during the arbitration that took place not long after Mr. Sander stepped down May 22. At that point, three of the 10 hearings had been held, and while there was some separation between the two sides on wages, they had a consensus on one key element of a possible award: a cap at 1.5 percent of base wages on employee health contributions in return for which the union would have permitted trains on the L and 7 lines to operate without a Conductor.

The health-benefit contribution was the most-controversial element of the previous contract, the one that led to a tentative deal reached by Mr. Toussaint following the strike being rejected by just seven votes out of more than 22,000 members' ballots cast. Adding to the anger over having to pay a portion of their own health care at a time when neither city employees nor those working at other MTA agencies like the Long Island Railroad had to was the fact that Mr. Toussaint had agreed to have this "tax" imposed on overtime earnings and night differential as well.

That deal, which eventually was imposed virtually intact by an arbitrator after union members voted it down, also contained a clause under which the MTA could impose a cost-of-living increase if health-care costs grew at a level above wages.Yet the MTA had taken advantage of this clause just once, prompting recent harsh criticism by its former board Chairman, Peter Kalikow, at the few million dollars it passed up to avoid ruffling union feathers.

From an objective standpoint, however, there was no question management had made out like a bandit on Mr. Toussaint's capitulation on the health-benefit contributions in the last negotiation. It even posed a conundrum for the conservative critics of the union: the tax on overtime earnings was the type they normally would rail against as a disincentive to employees working harder.

Mr. Toussaint clearly would have liked the entire health-benefit contribution to be lifted, but even the most laborfriendly of managements that's in the public eye would have had a hard time justifying that. And so during the arbitration the two sides focused instead on removing the hit on overtime in return for some money-saving changes in subway operations.

Angling Toward An Accord

The union agreed to permit One Person Train Operations on the 7 and L lines and the creation of a Station Maintainer Helper title to give NYC Transit greater flexibility in deployment of staff to clean stations. There were also indications that the MTA could live with the union's proposal— after the Mayor shot down the earlier possible deal for 3 4-percent hikes —of wage increases of 4, 4 and 3.5 percent.

That all apparently changed less than a month after Mr. Sander left. On June 19, after the final hearing had been concluded, the MTA withdrew its request for single-person trains on the two subway lines. It was under the impression, Mr. Zuccotti's decision stated, that this "would preclude the Panel's consideration of the Union's proposal to cap employee health contributions."

But, he continued, "While the MTA's unilateral action may have constituted a last-minute change to the previously negotiated understanding between the parties, the withdrawal did not take the employee health contribution issue off the table for the Panel's consideration."

Twelve days later, on July 1, the MTA withdrew its official offer of a 1.47-percent annual wage hike and sought a wage freeze for the current year with the possibility of a reopener for 2010 and 2011.

Zuccotti Saw Ability to Pay

Mr. Zuccotti, however, was not persuaded by the agency's claim that its fiscal circumstances had worsened. He noted the state financial assistance package approved in May that is expected to generate several billion dollars in revenue over the three years of the contract, and a provision of the Federal stimulus aid act that allowed the MTA to use up to 10 percent of the money it received toward operating expenses such as employee salaries.

"Finally, the MTA could, if it so chose, administer its capital program in such a manner as to reduce debt service while still maintaining the safe and efficient operation of the transit system," Mr. Zuccotti noted.

That led him to conclude, with the concurrence of the labor rep on the panel, Mr. Toussaint—with MTA designee Dall Forsythe dissenting—that "the Employer can provide for the wage increases set forth in this Award without implementing service reductions or fare increases, and while still going forward with core and mega projects, by utilizing the State's May 7, 2009 financial assistance package and other available means."

To compensate for the lost savings from the OPTO program being scrapped, Mr. Zuccotti scaled down the final-year's increase from 3.5 to 3 percent. He also rejected union requests for a dental health improvement, a boost in how much unused sick leave employees could convert to cash payments when they retired, and a three-day leave for any Train Operators who witnessed an incident where a train struck an individual.

Mayor's Deals Undercut Rhetoric

The Mayor's most-strenuous objection to the wage package concerned the final-year increase, even though it was the smallest one. But his own contract deals to some extent undercut that argument. Unlike the days when Mr. Zuccotti was a Deputy Mayor, city contracts are no longer uniform in their starting and ending dates, creating a certain amount of confusion, and in one case he cited a Correction Officer deal that runs beyond the final year of the Local 100 award without realizing that its two 4-percent hikes were partly offset by a reduction in the pay scale for new employees.

The decision also noted city Labor Commissioner Jim Hanley's testimony that the city has maintained a labor reserve for a potential 4-percent wage hike for United Federation of Teachers members that would take effect in mid-October despite the budget crunch.

Mr. Hanley said in an Aug. 12 phone interview that Mr. Zuccotti was making an erroneous assumption based on his testimony. "Anyone who reads the transcript would see that I talked about budgeting but I didn't say that's what the UFT settlement is going to be or that it's likely to be."

'Not Binding' But Some Relation

The Mayor also argued that the MTA's finances were worse than the city's and so it was unable to afford similar wage hikes. But while there has never been a direct link between raises for city employees and those in the transit system, Mr. Zuccotti noted that the deals have been close enough in the past that this was an active subject of discussion during the transit negotiations. "While the City pattern is not binding on the MTA, the Panel recognizes that, historically, wage increases for MTA operational employees have generally equaled or exceeded that of DC 37-represented employees," the decision stated.

There was more than a bit of irony in the contention by the Mayor and other officials that the MTA's moreexigent financial situation demanded that its union receive less than municipal employees have gotten under recent contracts. A dozen years ago, the Patrolmen's Benevolent Association argued essentially the reverse in an arbitration: that city finances had improved so markedly since District Council 37 had established a municipal bargaining pattern under a deal that began with a two-year wage freeze that this alone entitled the PBA to significantly more-generous terms.

Despite the stock-market boom at the time which had rocketed the city from major budget gaps to huge surpluses, a three-man arbitration panel, noting the city's arguments that deviating from the basic pattern would profoundly change collective bargaining for the worse, stuck the PBA with the same two-year freeze. Cases like that one have led several prominent union leaders to decry pat- tern bargaining even while city officials argued that it was the bedrock of labor-management stability; last week's award happened to be one of those relatively rare cases where an arbitration panel's adherence to historic pay relationships bit management rather than the union.

Can't Have Do-Over in Midstream

At least as decisive, said someone familiar with the process, was that the prior MTA management had either intimated or explicitly stated "that they could live with" the basic framework of the final award. "This [present] version of the MTA might have thought this was too much," said that official, who spoke conditioned on anonymity. "But every time there's a new player in an arbitration, you don't stop and say there's a do-over."

Larry Hanley, a vice president of the Amalgamated Transit Union who previously did battle with the MTA as head of ATU Local 726 representing bus personnel in Staten Island, called the award "good news for the workers" but wondered how much of the outrage expressed by management and editorial writers was based on the merits of the terms.

Referring to the News editorial blasting Mr. Zuccotti for a "giveaway," he said, "They're pissed off that the unions struck [four years ago], so whatever they got, it's too much."

For Mr. Bloomberg, he continued, "It's not politically important that this group of workers got what other workers got, so now he's whining."

Sees Hypocrisy At MTA

He added pointedly that prior to the 2005 walkout, MTA officials "were baiting [Mr. Toussaint] while holding arbitration out as an alternative. So he finally takes them up on it and now they're complaining about how the arbitration turned out."

Of course, having resisted arbitration so fiercely back then, it would have figured Mr. Toussaint would be just as reluctant to entertain it this time around. Some might conclude that he has mellowed or become lessconfrontational as a result of the hard lessons of that strike's aftermath, but that theory depends on ignoring the Local 100 leader's unrelenting and unapologetic conduct toward his critics both within the union and outside it over the past three years. Not to mention his statement last week castigating Mr. Bloomberg for his criticism of the award while comparing him to the Mayor of Memphis during the 1968 sanitation strike, the event that led to the fateful visit to the city by the Rev. Martin Luther King that cost him his life.

A far more persuasive explanation for why Mr. Toussaint so readily agreed to arbitration after the Mayor torpedoed a potential deal 10 months ago is that he had gotten a pretty good idea from Mr. Sander that the MTA would not strenuously oppose something similar in arbitration.

And so to a large degree the Mayor and others were tilting at ghosts: a banished Governor and his departed emissary to broker labor peace at the MTA, who had set in motion the kind of deal Mr. Toussaint was unable to get in 2005.