SEPTA, union reach agreement; Strike avoided

SEPTA and the Transport Workers Union Local 234 have reached a tentative agreement, avoiding a strike that would have shuttered buses, subways and trolleys.

The two-year deal gives union workers a 5 percent raise over the life of the contract. It needs to be ratified by the union members before it can take effect.

Details are sparse so far, but the union promised to release more information Saturday regarding contract terms and the ratification process. In calls for comment, representatives from SEPTA and the union declined to provide additional details. A source close to the negotiations said the deal is likely to be retroactive to March or April when previous union contracts expired — meaning there could be another contract fight in 18 months.

After a week of intense negotiations, both sides worked deep into Friday night to hammer out a deal. They were assisted by U.S. Rep. Bob Brady (D., Pa.) and other lawmakers.

The new deal is the culmination of negotiations that began in March, when one of the union contracts expired. (The other expired in April.) Union employees had been working without a contract since then.

The two sides had been battling over the length of a potential new deal. The union wanted — and eventually got — a two-year contract which they say will help it better assess how the Affordable Care Act will affect their health insurance plans going forward. SEPTA wanted a five-year deal, partly so it doesn't have to go through another long contract negotiation so soon.

Raises were another main sticking point. At one point, SEPTA reportedly offered a 6 percent raise over five years but the current contract calls for a two-year deal with a 5 percent raise. Sure looks like a win for the union.

It's still unclear whether the union workers will receive higher pension benefits — one of its core demands. Brown said that SEPTA management employees get much higher pension benefits than union workers. He provided this example to highlight the fight over pensions: If a SEPTA management employee contributes $1,700 per year to the pension plan, they'll receive approximately $8,000 per month when they retire. If a union employee contributes the same amount, they'll get $2,500 per month.

SEPTA, however, noted that the current pension structure was agreed upon in previous contracts and reminded workers that pensions are disappearing in favor of 401(k) plans. Still, it seems unlikely that a deal got done without SEPTA offering some concession on pensions.

The handling of employee grievances was also debated in the contract talks. Brown said in early October that SEPTA deals with grievances over dismissals first, then handles other matters. He argues that the process can take two to three years to complete for non-dismissal related issues, something Brown says needs to get resolved much faster. Details on employee grievances in the new deal remain fuzzy.

In a brief statement, SEPTA Board Chairman Pat Deon lauded the hard work of negotiators on both sides.

"The tentative settlement of this contract is due to the hard work of veteran, professional negotiators representing both the Authority and TWU Local 234." said Deon. "This process has produced a tentative contract that is fair to our union employees, our customers and the taxpayers, and balances the needs of our valuable workforce, while operating the transit system in the most efficient manner possible."

Source: Philadelphia Business Journal