Managers of U.S. bus and rail systems believe a Supreme Court decision earlier this week has given them an important tool for controlling the rise in workers' wages and benefits, which management cites as a major cause of the financial crisis facing mass transit today.
Labor representatives have reacted with dismay. A spokesman for a major public transit union, the 165,000-member Amalgamated Transit Union (ATU), has termed the decision a blow to its bargaining rights and said it will vastly complicate resolution of contract disputes.
The issue before the high court was whether an ATU local could sue the transit authority of Jackson, Tenn., in federal court for abrogating a contract with the union six years ago. The Supreme Court, in its ruling Monday, said that contract disputes at publicly owned transit systems are governed by state, not federal, law.
Transit managers and labor representatives both agree that state courts and law generally are less favorable toward unions than are federal. Labor's rights "will be more difficult to vindicate" at the state level, predicted ATU general counsel Earle W. Putnam.
The decision's impact will vary widely from state to state. Officials at Washington Metro say their system will not be significantly affected because the charter that created it specifies federal jurisdiction. But in states where state law conflicts with federal, it could strengthen management's hand in negotiating wages and benefits, which typically account for three-quarters of operating costs.
"We highly support state law for these contract and labor activities . . . and are delighted with the Supreme Court's ruling," said James Echols, executive director of the Tidewater Transportation District Commission, which runs the 150-bus fleet of Norfolk, Va.
Many transit managers think the ruling will have a particularly helpful impact on Section 13C of the Urban Mass Transportation Act of 1964. That section requires that any transit system getting federal money respect existing bargaining rights and not worsen conditions of employment.
This year, the federal government will distribute close to $4 billion in transit capital and operating aid. With ridership stagnating and costs rising, that money plays a crucial role in staving off bankruptcy and modernizing or expanding bus and rail systems.
To receive a grant, management must first sign a "13C agreement" with its unions affirming that the section's conditions have been met. Over the years, these agreements have come to contain conditions which managers say they accept only because their unions hold an effective veto over the federal money.
In particular, managers object to clauses requiring binding arbitration if the two sides reach an impasse in contract negotiations. Arbitrators tend to be outsiders who favor labor, ignore ability to pay and make it impossible to hold the line on wages and benefits, many managers argue.
Currently, labor contracts at 10 transit systems, including those of Atlanta, Boston and Chattanooga, Tenn., are being settled by arbitration, according to the American Public Transit Association (APTA), which usually represents management's point of view.
APTA counsel Robert Batchelder said he believes the Supreme Court decision will make the contents of 13C agreements subject to state law. That would mean, for instance, that if arbitration or strikes were not allowed under state law, they could not be included as rights in an agreement, he said.
Transit managers believe that if they can remove binding arbitration from labor agreements they will be better able to control labor costs.
ATU counsel Putnam said the decision did not eliminate rights in existing agreements but will make it harder for labor to enforce them in state courts. The union prefers going to federal courts, he said, because local ones are more likely to be influenced by local politics and are less knowledgeable in applying federal laws such as 13C.
Putnam rejected management's contention that arbitration favors unions, saying that it is a time-honored method of settling disputes that saves the public the disruption of a strike. Arbitration often proceeds with the full approval of management, he said, a point that managers concede.