As if the relationship between Capital Metro and its unionized workers weren’t already strange enough, a June 8 court victory for the transit agency made it a little weirder. And even though it’s a legal win, it’s raised the question of whether Cap Metro’s federal funding could be jeopardized.
First, the requisite background, which followers of Cap Metro have heard before: State law forbids public employees from collective bargaining and striking. However, federal law requires that any agency receiving federal funds must grant employees those rights. To get around this conundrum, in 1991 Cap Metro created a shell corporation named StarTran, which then technically became the employer of most of Cap Metro’s mechanics and bus drivers. The official line is that labor contracts and labor disputes are between StarTran and Amalgamated Transit Union Local 1091, not Cap Metro.
But Cap Metro seemingly argued nearly the opposite in challenging a $500 fine against StarTran in 2002 by the Occupational Safety and Health Administration for failure to turn in requested paperwork. OSHA has jurisdiction over private employers, and Cap Metro claimed that OSHA has no jurisdiction over StarTran because it is a public agency directly under the control of Cap Metro. The 5th U.S. Circuit Court of Appeals agreed.
So StarTran is a private contractor separate from Cap Metro … except when it’s not. (Cap Metro’s other labor contractors, First Transit, Herzog Transit Services, and Veolia Transportation, truly are private.)
The situation raises a big question: If StarTran is a public agency, are its employees forbidden to strike under Texas law? And if so, could federal dollars be withheld from the agency? ATU 1091 President Jay Wyatt believes it’s a problem. The Chronicle was unable to reach the vacationing Wyatt, but he told the Statesman, “Their grants are going to be held up based on this.”
Cap Metro interim CEO Doug Allen doesn’t agree. “The National Labor Relations Board looks at different things than OSHA,” Allen told the Chronicle. “[NLRB] looks at … who controls the work rules, who controls the daily operations, and who does collective bargaining. What the 5th Circuit looked at is who controls the StarTran board, and they viewed it that Capital Metro controls that.
“It is confusing, as we’ve all been talking about for a while,” Allen continued. “It’s a confusing arrangement between Capital Metro and StarTran, and that’s why in the [Capital Area Metropolitan Planning Organization] peer review a couple of years ago it said something needed to be done, and in the Sunset review [see “Cap Metro Promises to Be Good,” May 14] it said something needed to be done, and that’s why we’re looking at something different. But it doesn’t directly affect our ability to get federal funds at this point, because the 5th Circuit ruling looked at something different than what [NLRB] would be looking at.”
Allen says the agency is currently examining a range of options. Among them:
• Convince StarTran employees to become direct hires of Cap Metro. Those unionized employees would lose their right to strike and switch to the “meet and confer” status under which other public workers negotiate.
• Contract out all the labor by bid, which would put StarTran on the same footing as First Transit and Veolia in competing for Cap Metro work. This was the option called for by the Sunset Commission report.
The former option obviously would pose a real threat to that federal money. Allen said he spoke with Wyatt recently and says the union might be willing to give up the right to strike if it could have binding arbitration instead, something which Allen says is currently prohibited by state law.
Allen also says the transit agency is not warm to that idea, because it “would really give up the [Cap Metro] board’s fiduciary responsibility to a third party. … The recent Sunset report [wanted] the board to be more responsible for financial issues, not less.”
The Statesman report needled Cap Metro for spending $60,000 in legal fees to fight a $500 fine, “but it actually would have cost us more had we actually had to do the duplicative work of all the OSHA reports and all the work associated with that,” Allen claims. “We probably would have spent that much if not more on an annual basis.”
This article appears in July 2 • 2010.