Brotherhood of Locomotive Engineers
BNSF-BLE General Committees
Dennis Pierce
General Chairman
BNSF/BNNorthlines.MRL
817.338.9010
Pat Williams
General Chairman
BNSF/ATSF
817.426.9003
Austin Morrison
General Chairman
BNSF/FWD.JTD.C&S
806.358.9025
Rick Gibbons
General Chairman
BNST/SLST.MNA
417.887.5267
All BLE Members, BNSF Railway
Dear Brothers and Sisters:
November 16, 2003
File:National Contract/Profit Sharing
Enclosed you will find a proposed BLE/BNSF specific modification to the tentative BLE
National Agreement. This proposal was prepared pursuant to Article II of the proposed National
Agreement, titled "Alternative Compensation Program" and is being submitted for membership
ratification along with the proposed national settlement. Please be aware that before the
BLE/BNSF modification can be applied, it and the National Agreement must both be accepted
through membership ratification. As the proposed BLE/BNSF modification is being submitted
for consideration with the National proposal, please remember that you must cast separate ballots
on both proposals. For the National proposal to be ratified, a majority of the nationwide
membership group must cast votes in favor of the proposal. The BLE/BNSF modification is
only being considered by the BLE membership on the BNSF property and a majority of that
group must cast votes in favor for it to be accepted, but those votes will only be considered if the
National agreement has been ratified. If the National Agreement is accepted by the National
group and the on property modification is accepted as well, it will modify the National
Agreement only to the extent noted.
Before we discuss the enclosed agreements, we would briefly like to address the ratification
process. As many of you are aware, the four BLE General Committees on this property worked
very hard to present a fully on property settlement to this round of bargaining. Although we did
reach an agreement in principle, the Carrier was never released from national handling to move
forward with the on property agreement. While we were working to be released, the national
bargaining team came to an accord, and since that time, our efforts have been to retain all
portions of our original on property attempt and present them for membership consideration.
Although the above described ratification process is not as simple as our strictly on property
effort would have been, we do feel that we have retained the intent of our on property efforts and
have been able to present them for consideration albeit in a piece meal fashion.
BLE Contract Synopsis, BNSF
1
We would like to briefly discuss some of the particulars found in both of the enclosed
agreements. The National Agreement encompasses the national settlement of all Wage/Rule
issues as well as Health and Welfare issues. As with our attempted on property settlement, the
national Health and Welfare settlement docs include monthly employee contributions in order to
retain the benefit level that our membership is accustomed to. Although this was no ones first
choice, the other pattern settlements in our industry made it very apparent that BLE would not
close this round of bargaining without the inclusion of employee contributions to the ever
increasing insurance premium costs. The employee contributions found in the BLE proposal are
in line with those negotiated and/or arbitrated by other unions and will be applied retroactively to
July 1, 2001, also in line with the other negotiated and/or arbitrated settlements. Please note that
all monthly employee contributions will be taken from your pre tax earnings, much like 401K
contributions, minimizing the impact on pay day as much as possible.
The wage settlement in the proposed National Agreement will also be applied retroactively, with
back pay payable based on each employees earnings. It will most likely be years end by time the
agreement can be implemented, and in that event, the back pay period will include 4% of all
earnings from July 1, 2002 until December 31, 2003 as well as an additional 2.5% of all earnings
from July 1, 2003 until December 31, 2003. The temporary COLA increases currently included
in our pay rates from July 1, 2002 forward will be rolled out of the rates as the proposed general
wage increases will be applicable during that period. Also payable on signing date will be a
$1200.00 longevity bonus for all employees with seniority pre dating October 31, 1985. An
entry rate equity payment of $774.00 will also be due on signing, with that payment applicable to
all assigned engineers. When all signing date elements are calculated, a pre 85 employee
grossing $50,000 on an annual basis would receive approximately $3338.90, while a post 85
employee with the same gross would receive approximately $2138.90. A pre 85 employee
grossing $70,000 on an annual basis would receive approximately $4798.90 while a post 85 with
the same gross would receive approximately $3598.90. As you can see, even with the COLA
roll out and the retroactive application of Health and Welfare costs, significant back pay will be
received by the employees covered by the agreement. The cost and pay elements that make up
the back pay calculation are all but identical to the numbers that would have been generated
under our proposed on property agreement, so in that regard, the end is the same, we are just
using a different venue to accomplish it.
One of the other pieces of the national proposal that we would like to discuss is the inclusion of
"Trip Rates". This too was included in our on property effort and the primary purpose was to
eliminate the majority of the pre/post 85 pay inequities that have plagued our membership since
1985. Although post 85 employee do not qualify for the $1200.00 longevity payment, they will
realize in many cases as much as a 10% increase in annual income when trip rates are
implemented. This will be accomplished by only using pre 1985 pay rules and rates to calculate
the trip rate averages Although there are obviously concerns with any new pay structure, rest
assured that we will do everything in our power to insure that these trip rate averages truly reflect
the pre 85 earnings generated from the current normalized operation of each involved pool.
These averages will be payable to all employees, whether working or deadheading, whether pre
or post 85. The agreement also allows for reconsideration of the trip rate by either party if there
is material change in operation after the average is developed. We will closely monitor each
pool to insure that the trip rate remains a cost neutral average of the annual earnings currently
made by each pre 85 employee in any given pool.
BLE Contract Synopsis, BNSF
2
:
It is a matter of fact that we cannot continue to give all employees the same percentage increases
as in the past and ever resolve this pre/post 85 inequity. Directives have been issued to each of
um Granaal Committees making it the utmost priority that these inequities be resolved and it is
imperative in our minds that this be accomplished without delay.
am
We would also like to briefly discuss the BNSF specific modification, included as
"Alternative Compensation" option. This modification was also part of our on property effort
and as in that effort, it is being offered as a choice to all BNSF engineers. Our efforts have
always be driven towards presenting our membership with as many choices as possible, with
the clear understanding that the democratic voice of the membership will make that choice. If
the BLE members on the BNSF property decline this proposed modification, they will remain
under the national settlement of the bargaining round. If the national settlement is ratified and
the on property modification is also accepted, the national settlement will be modified as follows.
The July 1, 2003 2.5% increase found in the national agreement will be applied through the end
of 2003, and will be reflected in the back pay previously desuibal, The fust profil
sharing/general wage increase modification would then be effective on January 1, 2004, when
the pay rates as they stand on December 31, 2003 would be reduced by 1% going forward. In
addition, the 3% wage increase previously scheduled to be effective July 1, 2004 would also be
waived. In return, locomotive engineers would be entitled to a maximum profit sharing pay out
of 6% on 2004 carnings. As in our previous on property efforts, the formula used to calculate the
payable portion of the 6% would be the same formula used by the management.
To fairly compare the modifications described above, the traded general wage increases must be
converted from a July start cach year to an annualized value as profit sharing is based on an
annual percentage. For the year 2004, the July 1, 2004 3% increase, which would have only
been in effect for ½ of 2004, has an annualized value of 1.5% when spread over the entire year.
The 1% increase effectively waived on January 1, 2004 would be waived for all of 2004, and
when the two traded general wage increases are combined, the net increase waived for 2004
comes to 2.5%. This 2.5% would be traded for a maximum profit sharing payment of 6% of
2004's carnings. As part of the agreement, the Carrier has agreed to guarantee that the
employees will receive at least one third of the 6% value in 2004, resulting in a minimum
guarantee of 2% profit sharing pay out. As most of you are aware, profit sharing does come with
some risk, but that risk has been significantly minimized for the year 2004. Although 2.5% in
general wage increase has been waived, 2% profit sharing is guaranteed, with a potential of 6%.
As a result, the risk in accepting profit sharing in the calendar year 2004 is only .5%, or ½ of 1%
of the years carnings.
At the end of 2004, the membership would have a one time option to snap back to the waived
percentage wage increases from that point forward. The memberships' decision on that option
will be made after the pay out for 2004 has been determined. If the membership opts out of the
profit sharing program, the 1% wage increase waived on January 1, 2004 and the 3% wage
increase waived on July 1, 2004 would be applied to all rates from May 1, 2005 forward, but
there would be no retroactive adjustments to the period that profit sharing remained in effect. If
the membership opts to stay in the profit sharing program, the maximum pay out for 2005 will be
increased to 8% on a permanent basis with no further cost to the employees. The end result is a
permanent trade of 4% in general wage increases in return for a maximum profit sharing of 8%
BLE Contract Synopsis, BNSF
3
for all years thereafter. Please remember that these profit sharing percentages are in addition to
any profit sharing percentages already in effect on the BNSF property.
As information, the National Settlement also modified the original 3% wage increase due on July
1, 2004 by waiving .5% in return for a $40.00 pre tax contribution per employee per month by
the Carrier to fund a disability insurance benefit. As the on property modification waives the
original 3% increase to obtain a profit sharing option, we would not be included in the national
disability insurance program. At the same time, if we opt out of the profit sharing at the end of
2004, we would return to the full 3% wage increase rather than the 2.5% remaining in the
national settlement. In addition, under the on property modification, the BNSF membership
would have similar pre tax access to various insurance products, including group rated disability
insurance. The primary difference between the national and on property insurance option is that
under the national settlement, participation in the disability insurance program is mandatory.
Under the on property variation, the employee is able to make a selection. Although the benefits
and rates may vary between the two options, both provide a valid benefit and it is important that
the membership understand the differences.
The remaining items that the General Committees had previously included in our on property
effort will not become part of the settlement of this round of bargaining. Instead, they have been
moved into a system proposal to modify our existing schedules. These proposals are being
forwarded to each BLE Division on BNSF with all Division included in a property wide
ratification under Article 43(b) of the BLE Constitution and Bylaws. Again, although our first
choice was to present a single on property settlement of all issues in this round, we do believe
that we have managed to present all of the items in our on property effort for consideration,
albeit piece meal. The end result, if the three agreements are accepted, will be the same as
though it was done in a single document.
In closing, we the undersigned are convinced that the enclosed agreements do provide closure to
this round of bargaining in a manner that is equitable to the membership. There are several
things that bring us to that conclusion, but rest assured that no crumbs were left on the table in
BLF's collective efforts As we are convinced that a third party would not give the membership
any more than this at this stage of the round, we believe that the enclosed settlement is worthy of
your consideration. We also believe that the agreements being considered by the BLE Divisions
are worthy of your consideration and think that you will agree when you review them at your
Division meetings. A power point presentation explaining all parts of each agreement is
available upon request, please contact your Local Chairman to receive a copy.
Fraternally,
Dennis R. Pierce
General Chairman
off Cesis &C AME
Pat Williams
General Chairman
Austin Morrison
Rick Gibbons
General Chairman
General Chairman
BLE Contract Synopsis, BNSF
4
Alternative Compensation Agreement
Between
The Burlington Northern and Santa Fe Railway Company ("BNSF")
And
The Brotherhood of Locomotive Engineers ("BLE")
The following agreement is made pursuant to Article II - Optional Alternative
Compensation Program of the
2003 National Agreement
between BNSF, other Carriers represented by the National Carriers' Conference
Committee, and the employees of such Carriers represented by the Brotherhood of
Locomotive Engineers.
Article I-Alternative Compensation Program
Section 1-Profit Sharing
(a) A new profit sharing plan shall be established for all BNSF engineers,
effective January 1, 2004, according to the following terms.
(b)
Under the new plan ("PS" Plan), each BNSF engineer may receive a
profit sharing payment no later than April 30 of the year immediately following
each "performance" (calendar) year, the first one of which shall be 2004. For
2004, for each engineer, said payment shall have a maximum potential of (be up
to) six percent (6%) of the engineer's regular earnings (regular earnings exclude
such things as any bonus or lump sum under this Agreement, any retroactive
payment not attributable to 2004 earnings, benefit buy-out payment, moving/real
estate benefit, previous year's profit sharing payment, etc.) as an engineer on BNSF
property in the performance year. If the wage snap-back option provided for in
Section 3 of this Article is not exercised, then for performance year 2005 and each
subsequent performance year, the maximum potential shall be eight percent (8%),
otherwise applied as indicated above for 2004.
(c) Each engineer's profit sharing payment will be determined based on
the same company-wide goals, the same apportionment among the goals and the
same performance standards in meeting those goals as are used for that
performance year in the Incentive Compensation Plan for exempt employees
("ICP"). For example, at present, there are goals for operating income (40% of
total); free cash flow (20% of total); on-time performance (15% of total); safety
(personal injury rate and lost time) (15% of total) and contribution per revenue ton-
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
I
mile (10% of total). The payout on each goal depends on the attainment of
specific, pre-announced targets for the goals and the approval of the ICP
Committee. Presently, a 150% payout level for the ICP is equal to a 100% payout
under the engineers' plan. Therefore, as an example, for performance year 2004, if
the company has an ICP payout level at the 150% point, each engineer would get
6% as a profit sharing payment; if the company has an ICP payout level at the
target (the ICP 100% point), each engineer would get 4%; and if the company has
an ICP payout level at the 50% point, each engineer would get 2% as a profit
sharing payment. For each performance year, the actual payout level will be as
determined by the ICP Committee, and the same ICP goals and method applied for
exempt employees in the Operating Department will be used for BNSF engineers,
in accord with the financial result intended in the previous example.
(d) For performance year 2004 only, regardless of what the formula and
computation as described just above produce, an engineer would receive no less
than 33% of the maximum profit sharing potential, or, in other words, 2% of the
engineer's regular earnings as a BNSF engineer, as a profit sharing payment for
that performance year. There is no minimum payment guarantee for any
subsequent performance year.
(e) If the design of the BNSF ICP itself (not the type or level of specific
goals set from year to year) is ever changed in a way materially separating the
interests of engineers under the engineers' plan from the interests of BNSF
operating employees covered by the ICP, then the parties shall meet promptly to
revise the PS Plan in a way which does not so separate the interests of engineers
covered by it. If the parties cannot so agree, they shall submit the matter to
expedited, parties-pay, final and binding arbitration before a single neutral. In such
event, the arbitrator shall have jurisdiction exclusively to reformulate the PS Plan
in a way
which has no material adverse effect on either covered engineers or BNSF
and which effectuates the intent represented here in view of the changed
conditions.
Section 2 - Handling of General Wage Increases
Effective January 1, 2004, standard basic daily rates of pay for employees
represented by BLE in effect on December 31, 2003 shall be reduced by one (1)
percent. The two and one half (2-1/2) percent general wage increase otherwise
scheduled for July 1, 2004 and the national "Disability Insurance Plan", and the
$40.00 per month employer contribution to such plan, otherwise provided for
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
2
under the National Agreement, are eliminated in their entirety and shall not
become effective at BNSF.
Section 3 - Wage Increase Snap-back Option for 2005
(a)
The Brotherhood of Locomotive Engineers shall have a one time right
to cancel all engineers' participation in the PS plan after April 30, 2005, and,
effective May 1, 2005, "snap back" BNSF engineers' wage rates to the rates as
described in Section 3(b) below. To effect this one time election, BLE must
provide written notice to BNSF of its intention to do so and deliver such written
notice between April 1, 2005, and April 30, 2005. In the event such one-time
snap-back election is properly exercised, each engineer shall be eligible for a four
months' (prorated) profit sharing payment based on the ICP payout for
performance year 2005 (with a maximum of 8 percent of eligible earnings for the
period January 1, 2005 through April 30, 2005), but shall receive no wage increase
"backpay" based on the snap-back exercise, corresponding to any period
preceeding May 1, 2005. In such event, all engineers' eligibility for profit sharing
otherwise provided for in Section 1 above, based on any performance period
subsequent to April 30, 2005, will cease entirely.
(b) In the event that the "snap back" option is properly exercised,
standard basic daily rates in effect on April 30, 2005 will first be increased by one
(1) percent. The resulting standard basic daily rates will then be increased by three
(3) percent. Both increases will be computed and applied in the same manner
prescribed for a typical GWI in the 2003 National Agreement, except that such
computation and application shall be effective May 1, 2005.
Section 4
Nothing in this Agreement alters in any way the terms (coverage, etc.) of any profit
sharing agreement in effect prior to this Agreement.
Article II-Flexible Spending Account
Section 1.
Article I, Section 5(b) and Article IV, Section 5 - "Short Term Disability" of the
BLE 2003 National Agreement shall not become effective or otherwise apply at
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
3
BNSF. Instead, BNSF will establish an IRC Section 125 cafeteria plan for
locomotive engineers. This plan will have a flexible spending account that will
allow engineers to set aside money on a before-tax basis to pay for eligible
expenses incurred by the engineer and his/her eligible dependents..
Section 2.
The plan will also provide access to a variety of group insurance plans that will
allow engineers to obtain coverage by paying premiums, on a pre-tax basis when
possible.
Section 3.
This cafeteria plan is being established under applicable sections of the Internal
Revenue Code and other applicable laws as they exist in 2003. If the Code, or
other applicable laws subsequently change to the company's detriment, so that the
company is to bear more than just administrative costs, the plan will be revisited,
and the parties will reach a resolution that fairly accomodates their mutual
interests, including, if necessary, resort to a mechanism like that under Article 1,
Section 1(e).
This Agreement shall be effective on the date signed and shall remain in effect
until modified or changed in accordance with the provisions of the Railway Labor
Act, as amended.
SIGNED AT FT. WORTH, TX THIS
DAY OF
2003.
For The Burlington Northern and
Santa Fe Railway Company:
For the Employees
John Fleps
Vice President - Labor Relations
Represented by the
Brotherhood of
Locomotive Engineers:
���ڧ�
Austin Morrison
General Chairman
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
Milton Siegele
Assistant Vice President-Labor Relations
RL
Rick Gibbons
General Chairman
WAR
Wendell Bell
General Director-Labor Relations
Pat Williams
General Chairman
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
DAP
Dennis Pierce
General Chairman
205.
Steve Speagle
Vice President
ה
BNSF
Burlingto
Sorthern
Santa F
Railway
November 6, 2003
JOHN J. FLEPS
The Burlington Northern
Vice President - Labor Relations and Santa Fe Railway Company
P.O. Box 961030
Fort Worth, TX 76161-0030
2600 Lou Menk Drive
Garden Level - OOD
Fort Worth, TX 76131-2830
Phone: 817-352-1020
Fax: 817-352-7319
Side Letter 1
Mr. Dennis Pierce
General Chairman, BLE
801 Cherry St., Ste 1010 Unit 8
Fort Worth, TX 76102
Mr. Rick Gibbons
General Chairman, BLE
5040 S. Harmony
Rogersville, MO 65742
Gentlemen:
Mr. Pat Williams
General Chairman, BLE
509 SW Wilshire Blvd., Ste D
Burleson, TX 76028
Mr. Austin Morrison
General Chairman, BLE
7637 Canyon Dr
Amarillo, TX 79110
This letter confirms several understandings that the parties have reached in connection with the
National Agreement dated
2003 and the Alternative Compensation
2003.
Memorandum of Agreement dated
1. In the application of Article I, Section 1, of the 2003 BLE National Agreement, it is
agreed that, if an employee did not qualify for a longevity bonus under the UTU National
Agreement of August 20, 2002 and doesn't qualify for this longevity bonus under Section
1(b)(1), the longevity bonus would nevertheless be paid to the employee when he returns to
service in a craft covered by this Agreement.
2. In the application of Article I, Section 1, of this Alternative Compensation Agreement,
it is agreed that the profit sharing payment under that section would be included in the
calculation of vacation pay for vacation taken in the year after the receipt of such payment.
3. In the application of Article III, Part B, Section 2, of the 2003 BLE National
Agreement, it is agreed that the cost-of-living adjustments will be applicable to overmile rates of
pay.
4. General Wage Increases found in the National Agreement will be applicable to all
special allowances that are expressly subject to general wage increases.
BNSF Alternative Compensation Agr.
Ver.3BNSF-11/06/03
BNSF
Burlington
Santa Te
Railway
JOHN J. FLEPS
The Burlington Northern
Vice President - Labor Relations and Santa Fe Railway Company
P.O. Box 961030
Fort Worth, TX 76161-0030
2600 Lou Menk Drive
Garden Level - OOB
Fort Worth, TX 76131-2830
Phone: 817-352-1020
Fax: 817-352-7319
November 6, 2003
Mr. Dennis Pierce
General Chairman, BLE
801 Cherry St., Ste 1010 Unit 8
Fort Worth, TX 76102
Mr. Rick Gibbons
General Chairman, BLE
5040 S. Harmony
Rogersville, MO 65742
Dear Sirs:
Side Letter 2
Mr. Pat Williams
General Chairman, BLE
509 SW Wilshire Blvd., Ste D
Burleson, TX 76028
Mr. Austin Morrison
General Chairman, BLE
7637 Canyon Dr.
Amarillo, TX 79110
Prior to February 28, 2005, BNSF will notify its BLE general chairmen in writing of the
engineers' profit sharing payout level for performance year 2004.
Yours truly,
���
BNSF Alternative Compensation Agr.
Ver. 3BNSF-11/06/03
00
