Section Front Front Page |
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AMO Wins Fight For Wage Security
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| As Lone Plaintiff, Union Blocks Attrition In Federal Contracts | |||
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All civilian seafarers working under government charter will benefit from an important legal action taken alone by American Maritime Officers. The year-old case, concluded in Washington Oct. 10, was brought by AMO against the Navy's Military Sealift Command and the Department of Labor. The union challenged a five-year MSC charter award for the operation and maintenance of six newly-built and five converted large, medium-speed roll-on/roll-off ships. Opposing AMO with cross-motions for dismissal as intervenors in support of MSC and DOL were Patriot Holdings LLC, the California company that was awarded the LMSR operating charter, and two unions that have collective bargaining agreements with Patriot--the Sailors Union of the Pacific and the International Organization of Masters, Mates & Pilots. Taking no position was the Marine Engineers Beneficial Association, which represents engine officers employed by Patriot, the successor to American President Line. The LMSR charter award, issued in July 1999, cost AMO its engine and deck officer jobs on the converted LMSRs--USNS Shughart, USNS Gordon, USNS Gilliland, USNS Soderman and USNS Yano, which had been operated for MSC by Bay Ship Management. The USNS Soderman has since been reassigned to MSC's Maritime Prepositioning Fleet (Enhanced) program, or MPF(E). That ship and a second vessel, the roll-on/roll-off USNS Roy Wheat, will be covered under a separate operating charter not yet awarded. In his Oct. 10 decision, Senior U.S. District Court Judge William B. Bryant upheld the LMSR charter award, but he agreed with AMO that the Department of Labor had interpreted a federal wage and benefit protection law incorrectly. Judge Bryant also agreed with AMO that DOL's wrong advice had caused MSC to encourage annual benefit reductions for officers and crews on the 11 LMSRs in violation of the statute. It was the second time Judge Bryant had sided with AMO on the government charter wage-benefit issue. "The contracts for the LMSR officers have been improved as a result of AMO's court action," noted AMO National President Michael R. McKay. "More importantly, the legal precedent we have secured in two separate cases will result in improved wages and benefits for all personnel aboard all government-chartered vessels." Judge Bryant's rulings "will discourage all federal agencies hiring commercial U.S.-flag ship operators for specific services through competitive bidding from promoting wage and benefit cuts over the life of an agreement," McKay explained. "AMO lost a battle over five ships, but we won a war for every licensed and unlicensed contract mariner employed on a military support ship." McKay added: "The deck officers now working the LMSRs under MM&P contract are more secure than they were when Patriot won the bidding--thanks to AMO and its determination to pursue licensed labor's legitimate interests. The irony is that MMP sought to prevent appropriate judicial review of the wage-benefit issue--had the MM&P and the defendants been successful on that front, MM&P members aboard the LMSRs would now be looking at real, substantial cuts in benefits for themselves and their families." MEBA "went mute in the dispute, even though MEBA jobs and benefits were at stake," McKay said. "Maybe the MEBA leadership did not understand the issue or the implications. Maybe the MEBA administration was content to let the MM&P do the heavy lifting. Either way, the fact remains--MEBA members in the LMSR fleet are also better off because of AMO's initiative." McKay emphasized that Judge Bryant's decisions in the LMSR case will have "a positive impact" on all seagoing government charter jobs "well beyond the LMSRs." At specific issue in the LMSR case was the 1965 Service Contract Act. The law guarantees that employees of commercial contractors hired by the federal government earn wages and benefits at the prevailing private sector rates as determined by the Department of Labor at least every two years. The Service Contract Act also requires that wages and benefits in the final year of a government service contract serve as the minimum compensation levels in the first year of a successor contract, and that compensation not be cut over the life of any contract. In court, AMO said the charter award to Patriot was based on a flawed MSC Request for Proposals issued in August 1998 and amended in February 1999 to reflect the Department of Labor's wage and benefit determination a month earlier. AMO asked Judge Bryant to block the charter because the amended RFP relied on DOL's inaccurate reading of the Service Contract Act. Under the amended RFP, competing U.S.-flag ship operators were allowed to submit lower benefits for the LMSR officers and crews in years two through five of the charter, the union said. The amended RFP also said that a successor charter five years hence could begin with the lower benefit level established over the last three years of the current charter. AMO also sought an injunction against all current and pending MSC charters believed to be in violation of the Service Contract Act. Finally, AMO sought court concurrence that the LMSR charter dispute was a "related case" linked to an earlier lawsuit in which AMO prevailed over the Department of Transportation's Maritime Administration and DOL on Service Contract Act interpretation in a MARAD Ready Reserve Force ship management RFP. In the LMSR case, Judge Bryant refused to order MSC to solicit new operating bids for the LMSRs or other vessels because AMO "lacks the requisite standing to properly commence this action" under two separate federal laws, the Administrative Procedure Act and the Declaratory Judgment Act. However, Judge Bryant agreed with AMO that the LMSR and RRF cases were "indeed 'related,'" with "common issues of fact" and circumstances arising from "the same event or transaction"--specifically, DOL's misinterpretation of the Service Contract Act and the department's "misguidance of the contracting officials (in MARAD and MSC) that ultimately resulted in integrating the misinterpretation into the solicitation." In the MARAD case before Judge Bryant, AMO--the only seagoing union to pursue the Service Contract Act interpretation issue--contested an amended 1997 RFP that would have permitted ship operators to reduce reserve fleet wage and benefit rates in each of the last four years of the five-year ship management contracts. The amended RFP also would have allowed the significantly lower rates in the final year of the contracts to serve as the wage-benefit standard in the first year of the subsequent five-year contracts, which also would have been subject to annual cuts. "MARAD was in effect authorizing annually declining compensation for shipboard personnel in the RRF, regardless of fundamental fairness, the principles and traditions of collective bargaining, or the Department of Labor's statutory obligation to determine fair wage and benefit base levels," McKay recalled. "The amended RFP was an unacceptable breach of the Service Contract Act." Joined by MEBA and MM&P, AMO filed suit against MARAD, which then sought an out-of-court settlement. The agency and the unions could not agree, and the case proceeded--but not before MEBA and MM&P withdrew without notice or explanation as co-plaintiffs. Judge Bryant heard oral arguments, convened a meeting of the parties, and issued a temporary restraining order barring MARAD from awarding RRF vessel management pacts. On Oct. 14, 1999, Judge Bryant issued a permanent restraining order against MARAD. He said what MARAD had proposed was "arbitrary," an "abuse of discretion," and "contrary to the law." In his memorandum that day, Judge Bryant offered a detailed explanation of the Service Contract Act and noted that the law was intended to safeguard workers whose jobs were subject to "the cut-throat bidding process." The Service Contract Act created "a wage floor," not a wage ceiling, Judge Bryant said. Judge Bryant identified labor cost as "the dominant factor for the award of any contract" and "the principal component of the cost of providing the services sought by MARAD." Under the circumstances, "those who underbid the wage and fringe benefits in the applicable predecessor contract have a tremendous advantage in the bidding process and are likely to obtain the contract," Judge Bryant explained. "The amendments to the RFP constitute an obvious invitation to offerors to cut wages." He added: "The legislative history clearly reveals that Congress did not want wages cut as the result of the new contract." The Service Contract Act "articulates the determination in unmistakable terms--there is not even a hint of any notion of postponing wage cuts temporarily. The idea was to eliminate the practice. Obviously, the agency's action allows the old practice to continue, merely delayed by a short period." MARAD later issued a new reserve fleet RFP and announced its contract awards in May 2000. Of the 74 ships in the RRF, 39 were awarded to five companies that employ AMO in all licensed positions--American Overseas Marine Inc., Crowley Liner Services, Interocean Ugland Ship Management, Ocean Duchess Inc., and Pacific Gulf Marine Inc. In September 2000, the General Accounting Office--which conducts policy investigations and program audits for the House and Senate--upheld the RRF contracts, which are now in place. "In both the MARAD and MSC cases, AMO took action when no other officers' unions would," McKay said. "Both times, we won court support of the Service Contract Act in principle and in practice." McKay said AMO "will have no trouble placing its Shughart, Gordon, Gilliland, Soderman and Yano officers in other jobs." The union's employment base, he explained, "is sturdy enough to withstand the turnover." McKay concluded: "We are disappointed by the loss of five LMSRs, but we are gratified by Judge Bryant's determination to uphold the integrity of the Service Contract Act. Because of AMO's initiative, all licensed officers on government-chartered ships have enhanced wage and benefit security, whether those officers are members of AMO, MEBA, or MM&P. That's a significant achievement, and we are proud of it." | |||
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