Arbitration Board Approves
Railroads’ Health Care Hikes

January/February 2005 IBEW Journal

After five years of conflict, the hot issue of increases in health insurance cost-sharing for 5,300 IBEW members employed by the largest U.S. freight railroads was resolved in arbitration. On October 26, the arbitrator gave the rail carriers the green light to raise employee contributions.

The IBEW and the National Carriers’ Conference Committee have been in negotiations since 1999. Under the Railway Labor Act, the current contract remains in effect until a new contract settlement is reached or the parties exhaust all mediation and arbitration processes.

The arbitrator’s decision means that the March 2004 tentative agreement becomes the new contract, retroactive to 1999. IBEW members rejected three prior tentative agreements because they contained increases in health insurance cost sharing.

Retroactive wage increases in the new contract will be reduced by the new health care charges. The IBEW had proposed in negotiations to keep worker health care contributions at the prior contract’s rate of $8.67 per month. In arbitration, the union proposed as an alternative that members be exempt from increases in the first year of the new agreement and sought an understanding that no employee’s retroactive health care payments would exceed their wage increases.

The arbitrator rejected all union proposals. Rail workers will pay $33.39 per month for the first year, $81.18 per month in the second year, $91.38 in the third year, $100 per month in the fourth year, and $100 plus an additional charge for the fifth year.

IBEW Railroad Department Director Ray Cobb contends that the arbitrator’s decision is "yet another indication of the crisis facing U.S. workers and companies due to sky-rocketing prescription drug and medical care costs." Cobb states, "We must continue the fight for governmental action to address this situation."

"I am hopeful," Cobb continues, "that rail unions will be united during the next round of negotiations in January 2005 to win reasonable wage increases and succeed in relieving the membership’s increased burden for health care."