Privatizing MARTA jobs no cure-all for costs; federal law ensures union will endure even with private vendors

By David Pendered

At least one significant point is lacking from the general conversation about “privatizing MARTA” as a way to maintain transit service while reducing its cost.

Drivers who steered this type of bus for MARTA’s predecessor, Atlanta Transit Co., were unionized in the 1950s and that union legacy continues under federal law at MARTA and any private company it may hire to provide drivers. Credit: motorbussociety.org

The point is a labor agreement between MARTA and the Amalgamated Transit Union, Local No. 732. The union represents 64 percent of MARTA’s staff, which is larger than 4,500 workers, according to the recent management audit by KPMG.

Even if some or all of these jobs were privatized, federal law requires that existing rights and benefits of union jobs continue into jobs created by any private companies hired by MARTA. The notion that labor negotiations – and the higher personnel costs that the audit suggests stem from collective bargaining – would dissipate in a scenario of out-sourced jobs simply isn’t accurate.

“To privatize a significant number of bargaining unit jobs is an easy thing to talk about,” said Michael Walls, a labor attorney and former chairman of MARTA’s board of directors. “The actual doing of it is a very difficult thing to do.”

It’s difficult because of section 13(c) of the Federal Transit Act. This federal law applies to MARTA because MARTA used federal funds in 1972 when it paid $13 million for the old Atlanta Transit Co., which recognized the transit union.

Section 13(c) obligates any private employer hired by MARTA to continue collective bargaining rights. If negotiations break down, employees would have the right to strike – a right they do not have when they work for a public entity such as MARTA.

Specifically, the labor rights set out in the state law that creates MARTA would not apply to a private employer. Instead, labor relations with a private employer would be set out under the National Labor Relations Act, under which employees have a right to strike if the parties bargain to impasse.

MARTA has released a draft version of its management audit by KPMG.

MARTA’s transit union is covered under the Federal Transit Act because it was a recognized union when MARTA purchased the city’s previous transit system.

According to historical records at Georgia State University, the city’s first transit system was run by an ancestor of Georgia Power, which recognized the transit union in 1918. Georgia Power couldn’t make a profit on the transit system, and in 1950 its drivers went on a five-week strike. The power company looked for buyers and quickly sold to the ATC, which recognized the union and ran the transit system until it sold to MARTA.

The union came to MARTA with the deal. The same phenomenon occurred in Savannah, where the public transit system also acquired a union when it used federal funds to buy an existing transit system.

The way MARTA, and its vendors, can end its negotiations with the union is for MARTA to stop accepting federal funds.

According to a synopsis on the Labor Department’s website:

“Under Section 13(c) of the Federal Transit Act, an employer who receives federal mass transit funds must protect all covered mass transit employees affected by the use of federal money. The U.S. Department of Labor (DoL) must approve the arrangements made to protect these employees. For covered employees, these arrangements include:

• “Preserving their rights and benefits;
• “Continuing their collective bargaining rights;
• “Protecting them against a worsening of their employment conditions;
• “Assuring jobs for employees of acquired mass transit system;
• “Providing priority of reemployment if the employee is laid off or his job is eliminated; and
• “Provide paid training.”

Click here to read more from the Department of Labor.

The KPMG audit makes one reference to the federal law, on page 38 of the 114-page document:

• “Section 13C of Federal Transit Law offers certain protection to transit employees affected by Federal transit funding.”

KPMG looked at labor costs for savings because labor, along with fuel, comprises MARTA’s largest expenditures.

About 77 percent of MARTA’s operating budget goes to cover personnel costs that tally $345 million a year, according to the audit.

The audit does not parse out by the type of job (i.e., union or non-union) the amount of potential savings that could be achieved by privatizing jobs and reducing benefits. The figures cited in the audit are substantial:

• Up to $50 million a year in legacy pension plans, healthcare, retirement, absentee and workers compensation;
• From $60 million to $142 million over five years by outsourcing jobs that are deemed non-core to MARTA’s mission.

Click here to read the complete draft audit by KPMG.