NYC Transit Union Rejects Contract Offer by 7 Votes
Jan. 20 (Bloombag) -- New York's 32,000 bus and subway workers, who shut down the U.S.'s largest transit system for three days last month, rejected a new contract by seven votes.

The proposal, offering raises of 10.5 percent while requiring workers to pay part of their health insurance premiums for the first time, was rejected 11,234 to 11,227, said Roger Toussaint, president of Transport Workers Union Local 100. He said the union would seek to open negotiations with the Metropolitan Transportation Authority.

``We will go back to the drawing board,'' Toussaint said.

The tentative agreement, reached two weeks after the Dec. 20-22 walkout, called for raises of 3 percent in the first year, 4 percent in the second and 3.5 percent in the third, and an additional paid holiday, according to the union's Web site. The proposal also would have required workers to contribute 1.5 percent of their salaries toward their health insurance premiums.

Ainsley Stewart, a union vice president who had opposed the agreement, said speculation about resuming the walkout was ``premature.'' The strike -- the first in 25 years -- forced 7 million daily riders to find other ways to get around and cost the city's economy an estimated $1 billion.

``We'll try to recognize what the differences are and hopefully we can build a bridge,'' Stewart said. ``If that fails, we'll have to bring in the mediators again.''

Mayor Michael Bloomberg called the rejection ``disappointing news to all New Yorkers,'' and urged the union and the MTA ``to work together on an amicable resolution.''

Spokesmen for the MTA and Governor George Pataki didn't immediately respond to requests seeking comment. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

`Real Gains Now'

The union's executive board voted 37-4 to recommend ratification of the contract on Dec. 27. Toussaint, who said he was ``disappointed'' by today's results, had urged ratification in a message on Local 100's Web site, saying the agreement provides ``real gains now and real retirement security for the future.''

Union members voted by telephone or through the Internet.

Toussaint attributed some of the opposition to Pataki's criticism of a proposed pension refund that the union said would have given 20,000 members from $8,000 to $14,000. Toussaint said Pataki's threat to veto the payments caused them ``to doubt that a key benefit of the deal would be forthcoming.''

Standing in the Way

``I am very disappointed they rejected the contract, especially after I urged them to ratify it,'' said Gene Russianoff, head of the Straphangers Campaign, a transit rider advocacy group.

Russianoff said he spoken with TWU leaders and it was unclear to him why union members turned down the contract offer.

``Nothing in the contract struck me as unfair,'' he said.

Only about two-thirds of the union's members cast a ballot, meaning ``a third of the workers are standing in the way of a settlement,'' said Peter Panken, a lawyer with Epstein Becker & Green, which represented a Westchester County company in negotiations with the union earlier this year.

``Right now, the ball is in the union's court and the union is facing a third of their membership against the proposal,'' Panken said in a telephone interview.

It is unusual for a union's rank-and-file to reject a contract supported by the board, said David Gregory, a professor of labor law at St. John's University in New York.

``It's an unprecedented event in modern public sector labor law history,'' Gregory said in a telephone interview.

Militant Divisions

The decision by the union's membership shows its militant wing ``is much deeper, much more cohesive and much more organized than anyone anticipated,'' Gregory said.

``It shows to me that the divisions that were there in the union during the first negotiation are still there, they have a lot to work out,'' Russianoff said.

The tentative contract was to expire Jan. 15, 2009. The later date would eliminate the risk of a potential strike during the holiday shopping season.

``There's obviously a problem, not just in terms of relations between labor and management but in terms of union leadership and its dissident factions,'' said Kathryn Wylde, president of the Partnership for New York City, an organization of 200 corporate chief executives.

``If this is the harbinger of another strike it will be extremely expensive,'' Wylde said.

Two Days' Pay

Subway operators earned an average of $62,438 a year, including overtime, under the previous three-year contract, the MTA said. Train conductors averaged $53,000, subway booth clerks $50,720, and bus drivers $62,551.

The union still faces penalties for violating state law that prohibits strikes by public employees. Under the Taylor Law, workers forfeit two days' pay for each day on strike. The union itself was fined $3 million in a court decision that is under appeal.

The MTA has said it intends to ask the state's Public Employment Relations Board to revoke union dues collections through automatic payroll deductions, which could undermine union financing.