Home Transit LaborTWU Wage increases to cost MTA $100 million after judge backs TWU in appeal

Wage increases to cost MTA $100 million after judge backs TWU in appeal

by Benjamin Kabak

A New York State Court judge has backed the Transport Workers Union of American, Local 100 in its fight against the MTA to secure its binding arbitration award. In a ruling issued late Friday, Judge O. Peter Sherwood declined to grant the MTA an injunction against the arbitration award that guaranteed TWU workers 11 percent in wage raises over the next three years.

Noting that the court has “limited authority in this case,” Sherwood upheld the arbitration award on the grounds the arbitrators’ decision was “plausible or had a plausible basis” in reality. As long as the award criteria were “considered in good faith” and not unconscionable, the judge could not vacate the TWU’s victory. In plain English, basically, Sherwood noted that unless the arbitrators did not follow the rule of the law and were not unreasonable in explaining their decision, he would have to uphold the ruling.

As Sherwood noted, the arbitration panel followed the Taylor Law’s six criteria in determining the arbitration award. Since the arbitration decision was not “affected by misconduct, bias or procedural defects,” Sherwood upheld the award. “Although the [MTA] disagrees with the [arbitration panel] Majority’s analysis of MTA finances, it has not shown that the findings of the Majority are not supported by substantial evidence and do not have a plausible basis,” he wrote. (The full decision is embedded after the jump and available here as a PDF.)

In response to this decision, the MTA, which will soon announce a salary reduction for all non-union employees and substantial cuts to transit service across the city, decried the economic impact of this ruling. According to the authority, this court-mandated pay increase will add $100 million to the agency’s bottom line in 2010 and another $200 million in 2011.

“Last night the MTA learned that our appeal of the TWU Local 100 arbitration award was unsuccessful. We are extremely disappointed by this decision, which will force the MTA to pay wage increases that are inconsistent with the economic crisis in New York,” the authority said in a statement issued Saturday. “The ruling will have severe financial impacts on the MTA budget, coming on the heels of a State budget cut and reduction in payroll tax proceeds.”

The agency also fired the first salvo in what promises to be a bitter war of words between them and the TWU workers. In no uncertain terms, the MTA noted that the arbitration award may guarantee more money for union workers but will come at a high public cost. “We are working through the weekend to incorporate this news into the balanced 2010 budget that must be presented on Monday to the Finance Committee of the MTA Board,” the statement said. “Unfortunately, the magnitude of these changes makes it increasingly difficult to limit the impact this budget will have on the MTA, our employees and customers.”

For its part, the TWU offered up a more conciliatory tone. “The MTA has had their day in court and the judge ruled against them,” John Samuelsen, the new head of Local 100, said. “Now it’s time for them to stop wasting more of the taxpayers’ hard-earned dollars on lawyers’ fees and honor our lawfully obtained contract. I cannot think of a better way for the MTA to start this new labor/management relationship off on the right foot then to release our wage increases.”

Interestingly, Judge Sherwood himself questioned the economic wisdom of the arbitration award, but he was bound by law to uphold the decision. “In the current economic environment, the award of wage and benefits increases over three years of approximately 11.5 percent is a rich package but it is not unique. Were the court assigned direct responsibility for applying the criteria set forth in the Taylor Law to the package of economic benefits demanded by the union, the court might weigh them differently than did the Majority in this instance,” he said.

In the end, the MTA will have to find another $100 million it doesn’t have to institute a four-percent wage increase for thousands of TWU members across the city. Although the agency continues to maintain that it will not raise fares in 2010, the sweeping service cuts needed to cover this even greater gap would utterly cripple the system. I don’t see how, with the appropriations cutbacks, the payroll tax short fall and this arbitration ruling, a fare hike can be avoided.

As of now, the authority does not know if it will appeal the state court’s ruling.

Click through for the full opinion from Judge Sherwood or access it here as a PDF.


Watt v. Roberts

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28 comments

Aaron December 13, 2009 - 1:31 am

Thanks. I did an internship w/ a federal judge in Boston and we had a case on a similar matter (private arbitration didn’t go to decision, settled beforehand), and really, courts have very little power to overrule arbitration awards. The State’s interest in encouraging arbitration is so great that I think the Arbitrator has to have been on acid for the Courts to even consider overturning an award. I’d be curious in seeing the Supreme Court revisit the standards applied in federal court, but… this is not the case to take up.

I’ll have to read more about the Taylor Law, it seems like that gives the State Supreme Court marginally more authority than Federal District Courts have in private arbitration appeals, but… no matter what the award was, the surprise would be if they threw it out, not if they had upheld it.

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Abba December 13, 2009 - 1:46 am

Wow. I really hope the MTA finds other ways besides fare hikes and service cuts to balance the budget

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Lawrence Velazquez December 13, 2009 - 2:13 am

There really aren’t. By itself, the MTA can basically do just those two things. Even streamlining internal operations won’t save them hundreds of millions of dollars.

As previously detailed on this blog in excruciating detail, any permanent solution (congestion pricing, East River bridge tolls, etc.) requires politicians to grow a pair and stop thinking about the next election long enough to think about the future. This, of course, is a rather difficult proposition.

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E. Aron December 13, 2009 - 10:55 am

Wow, all an arbitrator needs to do is put in a good faith effort and not promote an unconscionable result? That’s akin to saying this is impossible to vacate. I’ve yet to take an ADR or labor course, but who’s paying these arbitrators – the union, the MTA, or both?

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Working Class December 13, 2009 - 11:01 am

These are “nuetral” arbitrators that are selected and paid by both sides. They side in favor of management the majority of the time.

This judge also mentioned that Bloomberg and the city set aside %4 raises for the teachers. Why doesn’t the TA ever put money aside in a lobor fund when times are good? The LIRR and MNR never have to fight to get the contracts that they get which are ten times better than this mediocre but fair contract that the twu got.

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E. Aron December 13, 2009 - 11:40 am

You do see how this is terrible timing, though, right?

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Working Class December 13, 2009 - 1:23 pm

Yes the timing couldn’t have been worse but this contract is a year old already as of jan. 2010

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Alon Levy December 13, 2009 - 1:27 pm

The LIRR and MNRR unions also think that running trains with 5 conductors is first-world practice. That doesn’t mean NYCT has to emulate those money sinks.

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SEAN December 13, 2009 - 11:42 am

This shows what binding arbitration truly means. When you make a deal with unions then have no intention of following through on the deal, you can expect either binding arbitration or a work stoppage. Since the Taylor law prevents the latter via the courts, that leaves the former on the table & the MTA lost. So now they have to make good on there end of the contract.

This falls on Bloomburg not the TWU.

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LUCY December 13, 2009 - 12:12 pm

What they didnt say is they get 2% from march to oct. and the othere 2% from oct to jan when broken down it is actually a 7.5% increase because there is no time they get 4% for full year. If they would stop the groups beatting fares and jamming machines they would be able to hang on to money not waste on repairs or loose to the swippers

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PB December 13, 2009 - 1:12 pm

Ok, so while I’m against wage increases, I’d say fine and good for the employees. Now I hope they stop abusing the rules and actually work and not do minimal work and going to McDonalds while we sit in the bus during rush hour. Where is the bus people ask, just stop and your neighborhood deli, mcdonalds, starbucks.

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Alon Levy December 13, 2009 - 1:28 pm

Remember: in a zero-interest rate environment, if everyone gets a raise, nobody loses out.

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Bladerunner December 13, 2009 - 2:14 pm

I am a transit worker… most of the time but the hammering this union and its members are taking by the print, radio and television media is grossly unfair.

How infantile is it of our two top elected officials to resort to name
calling? We, the TWU and its members are not the bad guys here. We are
only asking for a fair contract. I certainly do not want to strike. I can NOT afford to be out of work.

Setting aside the conspiracy of the governor and mayor to again pick on this union in order to set up the other unions for defeats at the
bargaining tables, especially in regards to pensions,pay,medical

These are only side issues of which there are many…………………

Let’s consider something smaller. Do you have access to a restroom at your job? I imagine the answer is yes and you probably don’t have to walk more than 100 feet to use the bathroom. I work in the subway tunnels along with thousands others. Do you think I
have access to a restroom when I am working between stations and all of a sudden have the urge to go? If, IF, I am lucky, there will be an
operating toilet in the station that I will have to walk thousands of
feet to. It’s up to us to “go” at our quarters before we start our work
and then hope that something doesn’t kick in while we are on the job. Oh, did I mention that most of the restrooms designated for employees in the subways are overrun with rats and/or leaky plumbing? Would restroom conditions like this offend you? I imagine it would.

With the utmost of respect to New York’s Finest and Bravest,
who in my opinion are grossly underpaid to keep you and I safe as they willingly sacrifice their bodies in their jobs – do you not consider the worth of the bodily sacrifices our membership have made “just” to get you from point A to point B? Those who work on the subway tracks, work “under traffic”, that is, as trains are whizzing by less than a foot from our body AND while we are standing next to a live third rail that is carrying 600 volts of direct current. I myself have been jolted a number of times in the course of my job and it is NOT a good feeling (to put it mildly) but then again, unlike some others I have known personally, I have gotten off the tracks alive. But by the time I retire at the young age of 60 (I mean, I’ve been reading how everyone envies us for retiring at such a young age),

I will be pretty much crippled with bad knees, bad back and bad shoulder from years of carrying heavy equipment and tools to maintain and replace rails and ties that weigh hundreds to thousands of pounds so you can travel to YOUR job safely and efficiently.

So, please do not consider us thugs or greedy or
selfish as Mayor Mike says. I only make $54,000 gross after years on
this job and that barely qualifies as lower middle class in NYC and after the taxes (not to mention utilities and gas and other escalating costs of living ) I have to pay for the privilege of living in this city, I barely get by.

But I’m thankful for this job and I do love my job. And I always
tell people to take the civil service tests because even though the money is not great, the job is secure, the benefits are good and we are
guaranteed a pension, at least until the government figures out a way to get their greedy little hands on it like the private sector CEOs have
done to their employees.

I will not take the time to remind you of past contract years when the
MTA has cried poverty at the bargaining table and then within days of
negotiating an unfair contract with the TWU, “suddenly” finds an abundant excess of money. Nor will I remind you of the last contract battle in 2002, when again the MTA cried poverty and we accepted a 6% wage increase over 3 years (we’re not keeping up with the cost of living here!) with 0% the first year and then after that contract was negotiated and signed,
Alan Hevesi found a second set of accounting books showing more favorable
figures for the MTA.

The MTA shows a complete lack of respect and appreciation for the
working men and women of the TWU.

And that’s what we’re fighting for!!!

NYC Trackworker

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Benjamin Kabak December 13, 2009 - 2:18 pm

I’m very sympathetic to your arguments and I believe that you made one of the more coherent arguments in favor of union support that I’ve heard in a long time. However, I have one big bone to pick with you, and I’m going to keep repeating it until people internalize it:

There never were two sets of books.

It’s true that Alan Hevesi made those charges, but after extensive investigation and two trials that both ended with the same result, we can that, legally, the MTA did not keep two sets of books. Furthermore, Hevesi ended up in jail on charges of corruption.

You can choose to hold a false trumped-up charge from seven years ago over the MTA’s head or you can take the time to read through their financial statements that they have been publishing for over a year. I’m taking the latter. There were no two sets of books, and this financial crisis is very real.

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rhywun December 13, 2009 - 2:24 pm

Something puzzles me. Didn’t the MTA already budget for this particular $100M? I mean, they knew about it for months? Surely this $100M isn’t on top of the other hundreds of millions we heard about last week.

Another question. The draconian service cuts that are surely going to be necessary–barring any one-time gimmicks that Albany comes up with–will cost how many union jobs…?

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SEAN December 13, 2009 - 4:47 pm

Odly enough there is a little upside to this crisis. You can excelerate the retirement of the oldest busses & subway cars in there respective fleets. As I type this the MTA is preparing to receive more of the latest hightech busses & R-160 series subway cars.

Aditional subway cars are being delivered over the next several years. Although time frames maybe delayed do to the MTA’s finances.

Remember the MTA cant delay to long do to ADA requirements for accessability.

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Older and Wiser December 13, 2009 - 5:27 pm

The MTA can easily afford this, and without service cuts or fare hikes. All they need to do is this: when remodeling the Fulton Street Subway station, don’t let it cost more than what it cost to build Yankee Stadium, or Lincoln Center, or Rockefeller Center for that matter.

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dave December 13, 2009 - 9:22 pm

As a transit employee I can tell you that I am fully aware of the terrible state of our economy and TAs budget problem. I believe that most of us would have understood that this was not a good time for a raise. The problem is that the last contract when the State. MTA and the city all had billion dollar plus surpluses they still wouldn’t give us a decent raise without givebacks and a battle for every penny. How can you expect us to willingly suffer the bad times; when we are not allowed to enjoy and prosper in the good times. Management and employees both work very hard to get over 5 million people to work every day. We should not be each others enemies. The media hates both of us. and few of our customers realize how much we do to make the system work. I believe the real problem comes from the state which wont,even in good times,contribute it fair share to NYC transit. One of the few things we tax payers get and use from the state on a daily basis is the transit system. The State needs to meet its obligation to us for our tax money.

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petey December 14, 2009 - 4:04 pm

i think the transit workers who posted above have been very patient in the face of degrading comments like PB’s.

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Freddie December 15, 2009 - 10:20 am

I am a former subway conductor. I lost my job because I did my job. I always got my train in on time and helped people get where they needed to go. Most of the black subway employees are racist and lazy. I used to get pissed off while I work my ass off these assholes go and hide to slepe. I lose my job and these assholes keep theirs. I think the people have a right to be pissed off when the TA keeps the terrible employees and fires the good ones.

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Rider December 15, 2009 - 7:03 pm

Curious as to what you were fired for if you were doing your job, and also how you figure most black subway employees are racist? Seems to me the system is better off without you.

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