the Company, the third arbitrator has not been selected, then either arbitrator may request the Federal Mediation and Conciliation Service to furnish a list of five (5) persons from which one (1) shall be selected to act as the third arbitrator. The arbitrators appointed by the parties, no later than five (5) days after the receipt of such list, shall determine by lot the order of elimination, and thereafter each shall in that order alternately eliminate one (1) name until only one (1) name remains. The remaining person on the list shall be the third arbitrator. All the conditions in this contract shall remain undisturbed during the arbitration proceedings. Each of the parties hereto shall bear the expense of its own arbitrator and the parties hereto shall jointly bear the expense of the third arbitrator. (b) Notice of any grievance shall be filed within one (1) year from the date of the occurrence giving rise thereto, and arbitration must be requested within one (1) year from the date of such notice. Sec. 6. Arbitration of future contracts.—In the event that, pursuant to Section 54 of this Agreement, either party requests changes in this Agreement or requests termination of all or any part of this Agreement and negotiations fail to result in an agreement between the parties, all issues in dispute shall be submitted to a Board of Arbitration on written demand of either party. The Board of Arbitration shall be composed of five (5) persons, one (1) to be chosen by the Company, one (1) to be chosen by the Union, and the two (2) thus selected to select three (3) disinterested arbitrators. The findings of a majority of said Board of Arbitration shall be final and binding on the parties hereto. Each of the parties hereto shall name its arbitrator within three (3) days after having received written notice from the other party hereto, and if either party fails to name its arbitrator it shall forfeit its case. If, after a period of five (5) days from the date of the appointment of the two (2) arbitrators representing the Union and the Company the three (3) disinterested arbitrators have not been selected, then either arbitrator may request the Federal Mediation and Conciliation Service to furnish a list of eleven (11) persons from which the three (3) arbitrators shall be selected. The Federal Mediation and Conciliation Service shall be asked to furnish such list within seven (7) days of the receipt of the request. The arbitrators appointed by the parties, no later than five (5) days after the receipt of such list, shall determine by lot the order of elimination and thereafter each shall in that order alternately eliminate one (1) name until only three (3) names remain. The remaining three (3) persons on the list shall be the three (3) disinterested arbitrators. A chairman of the Board shall be elected by the Board from among the three (3) disinterested arbitrators. All the conditions in this contract shall remain undisturbed during the arbitration proceedings. Each of the parties hereto shall bear the expense of its own arbitrator, and the parties hereto shall jointly bear the expenses of the three (3) arbitrators. The findings of a majority of the Board of Arbitration shall be submitted within ninety (90) days from the expiration date of the contract and shall be retroactive to the expiration date of the contract. EXHIBIT NO. 2 AMOUNTS OWED TO PENSION AND HEALTH FUNDS-D.C. TRANSIT SYSTEM, INC. (EXCLUDING VIRGINIA LINES SUBSIDIARY) APR. 28, 1969 Mr. J. GODFREY BUTLER, [Exhibit No. 3] GROUP HEALTH ASSOCIATION, INC., Chairman, D.C. Transit Employee's Health and Welfare Plan, DEAR GODFREY: The purpose of this letter is two-fold-first, to advise that GHA is undertaking the maintenance catch-up at the Labor-Management Health Center in Takoma Park, described in my March 4th letter to Mr. Richeson of the Fund; and, second, to ask what are the plans to pay the Fund's overdue medical bills to GHA. It is estimated that the capital outlay involved in bringing the Takoma Park facility into good order and keep it operational is $5,000 at this time. Within this limitation, GHA-in the interest of proper and uninterrupted patient care will assume the expense temporarily, and then make appropriate adjustment in the rental payment to the Fund. This approach was proposed in my letter to Mr. Richeson, of the Fund, on March 4, 1969. At its April 14th meeting GHA's Board of Trustees took notice of the mounting bill owed by the D.C. Transit Health and Welfare Fund to the Association. March and April interim subscription charge bills for Fund beneficiaries, amounting to nearly $120,000, have not been paid. The amount due becomes very large when there is added to the subscription charge bills the arrearage of the $175,000 recent adjustment billing for the period July 1, 1968 through December 31, 1968. This bill may seem high. The reason is it reflects the large amount of hospital care and expense for Fund beneficiaries during the last six months of 1968 coupled with the fact that the monthly interim subscription rate of $7.50 per beneficiary is outmoded compared with a current monthly per capita average cost figure of $11.25 for each GHA participant. The undersigned is duty-bound to call to your attention Article VII "F", of the basic agreement with the Fund, which is attached and which requires the denying of service to Fund beneficiaries until arrearages owed by the Fund to GHA have been paid. GHA would be reluctant to provoke Provision "F"-in view of the plight of the Fund at this time and the human misery the action might create. Of course your letter of October 10, 1968 stating that "the Fund has no intention of not paying its fair share of GHA's community-wide cost this coming year" is reassuring. On the other hand, it is quite important that the proposed plan for payment of the Fund's debt be presented to the Association for consideration and acceptance due to the unique situation facing the Fund at this time, notwithstanding-and if Provision "F" is to be set aside temporarily. May we hear from you soonest? Thank you. Cordially, FRANK C. WATTERS, BASIC AGREEMENT BETWEEN GROUP HEALTH ASSOCIATION, INC., OF WASHINGTON, D.C., AND THE TRUSTEES OF THE TRANSIT EMPLOYEES HEALTH AND WELFARE PLAN Effective as of April 1, 1964 Article VII Subscription Charges: B. GHA will bill the Trustees of the Fund monthly, at the beginning of each month. The Trustees will make payment within 10 days of the receipt of such bills. C. Beneficiaries of the Fund who become eligible for participation in the benefits of this Agreement subsequent to the effective date hereof shall be enrolled as of the first of the month following eligibility. The newly wedded spouse of a Fund beneficiary, unless enrolled within 90 days after the wedding, may thereafter be enrolled as a Fund beneficiary only on July 1 of each year. D. The names and addresses of new members will be supplied by the Trustees of the Fund as they become eligible for services. Notice of the ineligibility of beneficiaries for service will be supplied by the Trustees of the Fund to GHA. The Trustees of the Fund will designate which of its beneficiaries are "out-ofarea pensioners". E. The obligation to pay subscription charges and fees herein undertaken by the Trustees of the Fund shall be from the Fund, and shall not be a personal liability of the Trustees of the Fund. F. At any time when the unpaid liability of the Trustees of the Fund to GHA under this Agreement exceeds two (2) months, subscription charges (at the interim rate), GHA shall have the right, upon ten (10) days' written notice to the Trustees of the Fund, to deny service to all Fund beneficiaries until all arrearages owed by the Trustees of the Fund to GHA hereunder shall have been paid in full. If such arrearages shall not be paid within twenty (20) days after such notice, GHA's obligations hereunder and the rights of the Fund hereunder shall terminate but the Fund shall remain liable to GHA for any amounts owed hereunder. Notwithstanding the foregoing provisions of this Paragraph F, GHA agrees to continue the protection of all beneficiaries of the Fund during any period of strike or lockout, if, and to the extent that GHA is able to obtain funds, each month, by borrowing such funds without injury to the solvency of the Association. Both parties will cooperate in a joint effort to borrow such funds. The intent of this provision is that during each and every month of the strike or lockout, GHA will receive amounts equal to the monthly subscription charges payable with respect to Fund beneficiaries without using for such purpose the credit of GHA to the jeopardy of the Association's existence. The Trustees of the Fund agree to pay to GHA within one year after the strike or lockout ends, any unpaid subscription charges for such period of strike or lockout. The Trustees of the Fund agree to reimburse GHA for any interest expense actually incurred in carrying out this provision. In the event the liability of the Fund exceeds two (2) months' subscription charges (at the interim rate) during any such period of strike or lockout, the Fund also agrees to pay an amount equal to 6% per annum on such excess whether or not funds are borrowed by GHA. Signed: July 20, 1964. [Exhibit No. 4] JULY 29, 1966. Mr. MORRIS FOX, Vice President, D.C. Transit System, Inc., DEAR MR. Fox: Section 7(a) of the D.C. Transit System, Inc. Employees' Retirement Trust Agreement and Plan provides that contributions to the Plan for eligible employees receiving compensation from the Company shall be made by means of a check-off and shall be paid by the Company to the Trustee. Section 8(b) of the Plan provides that the Company shall contribute to the Fund in the hands of the Trustee a sum equal to twice the aggregate amount of the employees' contributions each and every month. Section 2(c) of the Transit Employes' Health and Welfare Plan provides that the contributions of members shall be made monthly by payroll deductions, and Section 2(f) provides that the Company shall contribute to the Fund on the first day of each month a sum equal to the aggregate of the contributions made by the members during the preceding month and the Company contribution, the latter equal to twice the contribution made by the members during the preceding month. As the result of a check made today with both the Pension and Health and Welfare Funds, it now appears that the Company has not made its contributions to the Pension Plan since May of 1966 and has made no contributions to the Health and Welfare Plan for the month of June, the latter of which was due on July 1. In addition, it also appears that monies withheld by the Company from the wages due its employees and required by the above agreements to be transmitted to the Trustees of the respective Funds have not been made, with the possible exception that during the month of July some employee contributions to each of the Funds were, in fact, transmitted to the respective Trustees. Your immediate attention to this deficiency in monies due from the Company to the Trustees of the respective Funds is obviously required. I would appreciate hearing from you as to the action you take immediately. I cannot emphasize too strongly the urgency of this request for your immediate action. Very truly yours, 29-234 0 699 GEORGE W. APPERSON, President. CABLE AUGUST 2, 1966. Mr. O. Roy CHALK, On Yacht Blue Horizon II, % Radio Schezeningen, Amsterdam. Realizing that you were out of town and being unable to communicate directly with Harvey Spear, Del Ison contacted me at approximately 5:00 p.m. last evening and related the matter hereinafter set forth. I am using this means of communication in view of your directions to me. Herman Sternstein, attorney for the Local 689, complained to the WMATC that D.C. Transit was approximately one-half million dollars in arrears to the pension fund. Thereafter, Mr. Sternstein advised Mr. Ison that the men are not aware of these facts and that they would be made aware of them at the forthcoming union meeting which is today. He was unable to inform Mr. Ison as to which action, if any, was being recommended to the men but he was of the opinion the men could go as far as go on strike. Mr. Ison wanted to be sure that you had personal knowledge of this information and requested that he be given the company's side of this situation. Mr. Ison just called this morning and stated that Mr. Sternstein had called him again. Mr. Ison requested Mr. Sternstein to avoid taking any action until Mr. Ison has received a direct communication from you. Mr. Ison has been advised that unless something definite is done today by D.C. Transit, serious consequences may follow. Mr. Ison stressed that he made no attempt to verify the Sternstein information but considers this matter to be of extreme urgency. Mr. GEORGE W. APPERSON, MANUEL J. DAVIS, D.C. Transit System, Inc. D.C. TRANSIT SYSTEM, INC., Washington, D.C., August 19, 1966. President, National Capital Local Division 689, Amalgamated Transit Union, Washington, D.C. DEAR MR. APPERSON: This will confirm the understandings arrived at on August 18, 1966, with respect to the present status of and future arrangements for payments to the Pension Fund and Health and Welfare Fund. 1. Both Employee and Employer contributions to the Health and Welfare Fund are up to date and will be kept current by monthly deposits. 2. Employee contributions to the Pension Fund are up to date and will be kept current by monthly deposits. 3. Company contributions to the Pension Fund are in arrears for May, June and July. These arrears will be "frozen", but future monthly payments will be kept current. The delinquency will be paid off as follows: the May delinquency in January, 1967, together with the payment for December, 1966; the June delinquency in February, 1967, together with the payment for January, 1967; the July delinquency in March, 1967, together with the payment for February, 1967. 4. The Company will pay into the Pension Fund, along with the payments for the above delinquencies, sums equal to the amounts which these delinquent payments would have earned for the Fund had they been deposited at the customary times, based on the average earnings of approximately 4.5% during the past year. The Company will also pay into the Pension Fund, commencing not later than January 1, 1967, sums equal to the amounts which would have been earned for the Fund (during the period of delinquency) by payments which have been made between April 1, 1966 and August 18, 1966, but which were not deposited at the customary times. 5. The Company will reimburse Division 689 for actual expenses for reservation and/or forfeiture of deposit on a meeting room or rooms, not to exceed fifteen hundred dollars ($1,500), incurred as a result of this problem. I appreciate the cooperation of the Executive Board and the Officers of the Union in the solution of a very difficult situation. Please indicate acceptance on behalf of Division 689 by signing and returning the enclosed copy of this letter. Very truly yours, O. ROY CHALK, President. [Exhibit No. 5] MARCH 18, 1969. O. ROY CHALK, ESQ., President and Chairman of the Board, D.C. Transit System, Inc., Washington, D.C. DEAR MR. CHALK: For some time now, as you are no doubt aware, the problem has become increasingly troublesome of the payments required to be made under our collective bargaining agreement to the Transit Employes' Health and Welfare Plan and to the D.C. Transit System, Inc. Employes' Retirement Plan. On several different occasions arrangements have been made as a result of which arrears in such payments were made up over a period of time, with a Company commitment that payments currently due would be made on a current basis. On each of those occasions, we accepted in good faith your promise, made in good faith, to keep current. Most recently we pointed out to you that the trustees of both Plans are each personally responsible for the administration of the Plans, and asked you to take some action to clear up the problem. There has been no action taken as a result of our conference with you. I am not certain that you fully appreciate the nature and extent of the delinquencies here involved. In order that there can be no doubt about them, I here reiterate that: 1) No employer payment has been made to the Pension Fund for any month beginning with July, 1963 until the date of the writing of this letter. 2) Employee contributions deducted from the employees' pay during the month of October, 1968 were not transmitted until December 9, 1968; for November, 1968, the transmittal date was February 17, 1969 and for December, 1968, the transmittal date was March 4, 1969. The employee wages withheld in the months of January, February and March, 1969 for transmittal to the Pension Fund have not been transmitted to the trustee bank. I underscore the word not because in your own instructions to your people you have always been absolutely adamant that the payment of the employees' wages should not be held up. 3) No employer payments to the Health and Welfare Fund have been made for any month since September, 1968 to date. 4) Since the Union put up its treasury of $225,000 as collateral for a loan from the American Security Bank to pay Group Health $207,000 in past due obligations, we have relied on the Company's promise that payments to the Health and Welfare Plan would be kept current. Wages withheld in December, 1968 were not transmitted to the Health and Welfare Fund until February 10, 1969. Wages withheld in January, 1969 were not forwarded until February 14, 1969. Wages withheld in February and March of this year have not, as of this writing, been transmitted. 5) The sums due to the Pension Fund approximate 12 million dollars. The loss of income to the Pension Fund seriously affects its actuarial soundness. At a minimum, this will increase future costs. 6) The sums due the Health and Welfare Plan approximate $500,000. The Health and Welfare Plan owes American Security over $130,000. It owes Group Health $121,000. A current Group Health bill for an amount in excess of $110,000 is expected momentarily. The X-ray equipment and essential heating repairs at the Health Center involve additional indebtedness in excess of $18,000. The employees stand in imminent danger of losing this very important protectiona protection which I personally know has been very close to you for all the years of our relationship. The amounts of money talked about above as now owed exceed 2 million dollars these debts are unsecured. As your represenatives and advisors have undoubtedly told you, it is inconsistent with Taft-Hartley tax-exempt Plans to have the Plans lend you money to run the business. Of course, what you cannot do directly, you should not do indirectly. We have previously called to your attention the fact that each of the Plans requires three Company trustees. Despite that fact, the Company has had only two trustees for some time now. Undoubtedly the best solution to this particular problem is for you to be the third Company trustee. In that way you can be certain that you are currently informed as to the status of these Plans, and not have to rely on relayed information. In any event, the appointment of the third trustee is long overdue. |