LIRR's archaic work rules prove costly

Union work rules that allow Long Island Rail Road employees to earn several days' pay in a single eight-hour shift cost the agency more than $2 million last year and significantly pad salaries and pensions, according to LIRR documents obtained by Newsday.

The work rules -- some dating back to contracts negotiated in the 1920s -- require the LIRR to make penalty payments of as much as an extra day's pay each time an employee performs any work outside his or her designated assignment. The LIRR spent $2,015,431 on work-rule penalties last year, down from about $2.3 million in 2009 and about $3 million in 2008.

"It probably looks outrageous," said David Morrison, a former labor relations supervisor for the railroad and an LIRR historian. "But the labor unions are so buried in tradition that it's awfully difficult to overcome."

With the contracts of all 11 unions up for negotiation and the financially struggling MTA looking to slash labor costs, LIRR officials again are taking aim at the work rules. It's the latest round in a management-labor battle that has raged at railroads throughout the country for more than half a century.

Metropolitan Transportation Authority spokesman Jeremy Soffin would not give specifics about the MTA's plan to address work rules in its labor negotiations.

"The MTA continues to seek, through collective bargaining, the elimination of work rules that hamper scheduling and operational flexibility and unnecessarily increase labor costs," he said. "There is no rational reason to have these antiquated work rules in the operation of a modern and efficient rail operation."

Michael Quinn, general chairman of the Brotherhood of Locomotive Engineers and Trainmen, declined to comment, citing contract negotiations with the MTA.

Changing won't be easy

Frank Wilner, national spokesman for the United Transportation Union -- the LIRR's largest labor organization -- stressed that work rules represent compensation the railroad's managers cannot unilaterally take away.

The rules were "achieved through collective bargaining in lieu of additional compensation in the form of wage increases, lower health care cost-sharing, additional health care benefits or other valuable benefits, such as additional vacation," he said.

Work-rule violations can especially boost salaries of senior LIRR employees, officials said, because they get first crack at picking assignments.

Retired engineer Dominick Masiello got the most penalty pay of any LIRR employee in 2009 and 2010, according to documents provided by the agency.

Masiello, 57, of Port Washington, almost doubled his $75,000 salary in 2009 by adding $70,138 from work-rule violations. In 2010, his last year at the LIRR, he made more than $250,000, including $41,609 in penalty payments.

He is collecting an annual pension of $122,096, in part because of work-rule penalty payments, overtime and reimbursement for unused vacation and sick time.

Masiello declined to comment.

All of the LIRR's top 10 earners of penalty payments last year were engineers, who are represented by the Brotherhood of Locomotive Engineers, one of the oldest and most powerful trade unions in the country. Work rules in the contract of the 148-year-old union, which represents the railroad's 700 active and retired engineers, are more costly than those in contracts of the LIRR's other unions.

The other nine engineers in the top 10 made between $25,000 and $41,000 last year solely from work-rule violations. The MTA said none of them have submitted an application to retire.

Though the LIRR's expenses on work-rule penalties last year comprised just "three-tenths of 1 percent" of the agency's 2010 payroll of $583 million, Soffin noted that the greater impact on the LIRR may be on pension costs.

The LIRR is paying about $106 million a year in pensions, and has about as many retired employees -- slightly less than 6,400 -- as it does active workers.

An employee who averages $10,000 a year in penalty payments might add $5,750 to his or her annual pension after retirement, according to the MTA.

Used by senior workers

Employees at the top of the seniority list use the rules "to maximize their individual benefit" in their final years of employment, Soffin said.

Typically, the most senior employees pick assignments that lend themselves to work-rule violations -- such as being near Penn Station at the frenzied start of a morning rush hour, when LIRR management, faced with staffing problems, has to make split-second decisions to keep trains moving, railroad officials said. That could trigger violations because of a change of assignment.

The LIRR's most senior employees are in a now-closed pension plan that can pay them 2 percent of their highest-earning consecutive 60 months out of the last 120 months of employment, and an additional 1.5 percent for any years in excess of 25 years on the job. It places no cap on how much an employee can pad a salary with work-rule penalty payments.

In 2010, seven of the railroad's top 10 earners of payments from work-rule violations had more than 20 years on the job.

Several of the rules were negotiated in the early 1900s to deter management from asking too much of employees. Back then, the difference between operating a dirty, stuffy, loud steam engine and a state-of-the art electric passenger train was considerable, railroad officials said.

"It was an entirely different railroad," said Mitchell Pally, of Stony Brook, an MTA board member. "When it was done, it probably made sense to somebody."

Changes in technology and the LIRR's operation have largely removed the disparities between most assignments cited in work-rule violations, said Morrison, of Plainview.

He said one such obsolete case is a "co-mingling" rule from the 1960s that restricts engineers from operating diesel and electric equipment in the same shift.

The rule gives engineers an extra day's pay if they switch from operating one type of locomotive to another, if only for a few minutes of their shift. It cost the railroad $744,159 last year, records show.

The rule applies even though the controls in the trains typically involved in co-mingling violations -- those that switch between diesel and electric power -- are nearly identical. The LIRR began using the so-called "dual-modes" in 1994.

Another rule entitles engineers at the LIRR's Richmond Hill yard to extra pay whenever they move a locomotive into or out of the Sheridan Shop, located just yards outside the facility. The rule was established to coincide with the opening of the shop in 2000. The actual work takes about 10 minutes, but an engineer asked to do this earns an entire extra day's wages.

"It's a stupid rule," Morrison said. "However that rule got negotiated is beyond me."

Other rules involve changes of assignment and tests of equipment.

LIRR officials said that, while not routine, it's not too unusual for a worker to benefit from more than one work-rule violation on a single day. For example, an engineer who begins his day moving diesel engines in a yard, and then is needed to operate an electric passenger train, would get penalties for changing classes of service, and for co-mingling. He would get three days' pay for one day's work.

Union representatives said previously that the railroad could avoid penalties through increased staffing of some jobs. But LIRR officials said it's usually cheaper to pay the penalties than hire an extra employee to do little work.

The LIRR stepped up efforts to control work-rule violations after an MTA inspector general's report in 2006 found that "penalty payments are not adequately being monitored." Through more aggressive managing, the LIRR has reduced penalty payments by one-third since 2008.

Managers have gone so far as to prohibit more than one kind of train at the Oyster Bay rail yard to prevent co-mingling, and built a new track at the Richmond Hill yard to keep engineers from having to use the Sheridan Shop.

But the LIRR still must violate work rules and incur the extra costs to keep trains moving in a timely way, especially during a major disruption, such as a blizzard, officials said.

LIRR president Helena Williams said during a news conference in April that the agency intends to take up the issue of work rules in collective bargaining and "clear them out."

That probably is easier said than done. Because the rules were negotiated in lieu of other benefits or pay, unions should not give them up for nothing, union spokesman Wilner said.

"Otherwise, any change or elimination of work rules would be the equivalent of labor accepting a reduction in compensation," he said.

The LIRR last went after work rules aggressively during its 1994 negotiations with unions. Following a two-day strike and pressure from then-Gov. Mario Cuomo, the LIRR backed off.

Strikes have led to changes

Other railroads have withstood lengthy work stoppages before eliminating some rules. A 1983 strike against the Southeastern Pennsylvania Transportation Authority lasted 180 days before many of its antiquated work rules were jettisoned.

The LIRR's sister railroad in the MTA, Metro-North, won an arbitration award to do away with many of its work rules after a six-week strike in 1983. But some financially burdensome work rules remained, including one that paid an engineer an extra day's wages if his train did not have drinking water. That rule was negotiated away in 1995.

Similarly, the LIRR and its unions have amicably done away with some work rules over the years, including one that paid engineers for an extra day if they had to clean their own windshields.

The rules that remain will be tough for the LIRR to abolish, Morrison said.

"The unions know the value of these rules, and how much money they're bringing into the membership," he said. "And they're not going to let them go unless they get something serious in return."