Boeing be requested to show firm agreements with the appropriate unions providing coverage for work to be performed at KSC under this procurement. Upon conclusion of the negotiations, the SEB is to report again on the results obtained so that my final approval can be given prior to contract award. Concur :

Attention: Code K/Daniel J. Harnett.

To: NASA Headquarters.

GEORGE M. Low,
Acting Administrator.

HOMER E. NEWELL,

Associate Administrator.

WILLIS H. SHAPLEY, Associate Deputy Administrator.

From: JFK Space Center, Fred Boles, Deputy Procurement Office.

CONFIRMING TELEPHONE CONVERSATION

The basic reason for the difference between TWA and Boeing costs proposed are as follows:

1. Lower Overall Costs

A. Lower Rates

The IAM bargaining agreement of TWA is for airlines operation that was negotiated on a national basis for all TWA operations. The Airlines agreement was then applied to aerospace work at KSC. The significant increase in rates over the past several years in airlines operations was therefore applied to KSC work. The Boeing rates are based upon existing labor agreements that were negotiated nationally with the IAM for aerospace operations. Boeing proposes to use their existing agreement and rate structure for our new contract. Examples of differences:

Under TWA bargaining agreement, a maintenance mechanic, painter, carpenter or electrician is classified as a mechanic with a labor rate of $5.79 per hour. A maintenance mechanic, when hired under the Boeing agreement would be classified as a maintenance mechanic A, grade 9, or maintenance mechanic B, grade 5, or maintenance mechanic learner grade 1. Those in a grade 9 would receive $5.24 per hour, B-grade 5 $4.01-learner grade 1 $3.40.

A painter or carpenter (both classified as a mechanic under TWA) would be classified as a painter or carpenter, a grade 8 or B, grade 5, or learner grade 1 under Boeing. The rates would be:

Carpenter or painter A grade 8, $5.06 per hour.

Carpenter or painter B grade 5, $4.01 per hour.

Carpenter or painter learner grade 1, $3.40 per hour.

An electrician would under Boeing be:

Grade 9, $5.24.

Grade 5, $4.01.

Grade 1 learner, $3.40.

The above rates represent a significant portion of the total hours proposed for employees covered by bargaining agreements.

B. Less People.-The Boeing proposal and TWA proposal for fixed line manpower were identical as to numbers of people.

The RFP required all proposers to submit a basic proposal on a fixed level of line manpower. The contractor could propose his own level of management. Boeing proposed 50 less management personnel than TWA. After careful evaluation by the source evaluation board this level of management was considered reasonable.

C. Less Fee.-TWA's fee proposal was higher than Boeing's. The comparison is as follows:

Note: The labor rates in 1 above for both contractors consists of bargaining agreement rates plus a cost-of-living allowance and an escalation factor for the period proposed. Also some of the Boeing rates include an offsite differential allowance.

THE BOEING CO.,
December 3, 1970.

To: John F. Kennedy Space Center, National Aeronautics and Space Administration, Kennedy Space Center, Fla.

Attention: AD-PRO, Mr. Fred Boles.

Subject: Trans World Airlines, Inc., Protest on RFP 2-370-2.

1. This letter is in response to your two letters of November 25 and 30, advising The Boeing Company of the protests filed by TWA.

2. The proposal submitted by The Boeing Company was prepared based on the existing collective bargaining agreement between The Boeing Company and the International Association of Machinists and Aerospace Workers, AFL-CIO. The Boeing Company believes that the acquisition of additional work, upon receipt of the award, falls under the scope of the aforestated bargaining agreement which is binding not only on The Boeing Company but also upon the IAM. The International Association of Machinists, certified by the National Labor Relations Board, is currently recognized under this agreement as the exclusive bargaining representative for "all production and maintenance employees in Brevard County *** employed by the company ***"

3. TWA, in its protest, alleges that the Boeing proposal is not responsive to the guidelines for competition, and in particular the NASA answer to Question 56. In the answer to Question 56, NASA said: "Under a recent series of cases, the NLRB has held that the successor-employer must assume the predecessor's collective bargaining agreement * * *"

In response to the answer to Question 56 requiring the offeror to apply the reasoning of such cases, The Boeing Company in its proposal stated that the collective bargaining agreements covering security guards and fire service personnel, employees who were employed by subcontractors of TWA, would be applicable to The Boeing Company.

4. Like the TWA subcontractors, The Boeing Company is subject to the National Labor Relations Act. TWA is governed by the Railway Labor Act-an Act which is applicable to "carriers" only. Therefore, The Boeing Company, since it is not a carrier, is not and cannot be subject to the Railway Labor Act. The collective bargaining agreement between the incumbent contractor and the IAM is, in the language of the agreement, "in accordance with the provisions of the Railway Labor Act, as amended. Therefore, in addition to the fact that the overall contract is "carrier" oriented for application under and pursuant to the Railway Labor Act, there are specific provisions of the agreement which are of questionable legal validity or practicability as applied to The Boeing Company. An example is the requirement of the TWA agreement that District Lodge 142 of the IAM admit to membership guards employed by TWA. This requirement, while lawful under the Railway Labor Act, would prevent District 142 of the IAM from being certified under the National Labor Relations Act (Section 9(b)) as the bargaining agent for the employees of The Boeing Company in the bargaining unit set forth in the TWA agreement. Likewise, the National Labor Relations Act contrary to the Railway Labor Act and the provisions of the TWA contract with District Lodge 142, contemplates the intervention of state "right to work" laws (which Florida has) on contractual requirements relating to union shop. Accordingly, the application by The Boeing Company of the union shop provisions of the TWA contract would be, at the least, of legally questionable validity at KSC. Further, many provisions of the TWA contract contemplate the application of the provisions of the Railway Labor Act (i.e., setting up a system board of adjustment, utilization of Section 6 procedures of the Railway Labor Act, etc.), and, thus, could not be applied to or by The Boeing Company which is not subject to the Railway Labor Act.

5. As to the comment in the protest on policy considerations, the award of the contract to The Boeing Company would not be contrary to national labor policy or deprive employees of collectively bargained benefits because The Boeing Company based its proposal on existing rates and benefits applicable to The Boeing Company, which have been established through collective bargaining with the same international union that has an agreement with the incumbent contractor. The Boeing Company submits that the national procurement policy of effecting economic savings in the use of public monies is not compromised where the same international union is involved as the bargaining agent for The Boeing

Company and the incumbent contractor. This factor also renders unlikely the existence of any labor disputs over the assuption by The Boeing Company of the work covered in the award.

6. If additional information is desired, please advise. Sincerely yours,

C. R. McGEHEE,
Division Manager.

LAW OFFICES OF GRANVILLE M. ALLEY, JR.,
Tampa, Fla., December 14, 1970.

Re NASA Contract for Support Services at Kennedy Space Center-Transworld Air Lines, Inc., Protest on RFP 2-370-2.

ROBERT KING,

Director, Industrial Relations for NASA,
Charlottesville, Va.

DEAR MR. KING: Enclosed please find a memorandum clarifying and providing legal support on the position taken by Boeing in their bid on the NASA service project.

We have also enclosed xerox copies of the cases sited, a copy of the "position letter" sent to NASA on December 3, 1970, and a copy of the existing BoeingIAM labor agreement.

Should you desire any further information, we will be happy to provide it to

you.

Sincerely,

Enclosures.

GRANVILLE M. ALLEY, Jr.

Subject: Trans-World Airlines, Inc., protest on RFP 2-370-2.

This is further clarification and legal support for the position taken by Boeing in their bid on the NASA services project and the position taken by Boeing in its letter to NASA of December 4, 1970 (attached as Exhibit 1).

I. The question has been raised as to whether Boeing would be a successor employer to the IAM-TWA labor agreement. It is Boeing's belief for the reasons hereinafter set forth, that they would not be a successor.

A. The NLRB, in determining whether an employer is a successor, as that term is understood in the labor relations context, considers the existence or nonexistence of a "change in the employing industry." N.L.R.B. v. Alamo White Truck Service, Inc., 273 F. 2d 238 (5th Cir. 1959); Federal Electric Corp., 167 NLRB 469 (1967). It is Boeing's belief, based on the applicable law, that there will be a significant change in the employing industry. The TWA employees performing services at the Cape are but a small percentage of the overall TWA work force. The "TWA employing industry" is engaged primarily in airline transportation. The Boeing "employing industry" is manufacture and service oriented-Boeing does not engage in airline transportation. The significance of the difference between the two "employing industries" is amplified by the fact that Congress enacted separate labor legislation for each. Those companies engaged in airline transportation as the "employing industry" are subject to the Railway Labor Act. On the other hand, manufacturers such as Boeing are subject to the National Labor Relations Act. Boeing, not being a carrier, is not and cannot be subject to the Railway Labor Act.

B. The question of successorship is twofold. First, is the successor (Boeing) bound by the terms of the predecessor's (TWA) labor agreement? Secondly, is the successor required to recognize the predecessor's labor organization as the representative of the successor's employees? Both of these questions are answered in the negative.

1. Boeing cannot be bound by the TWA-IAM labor agreement, because TWA is subject to the Railway Labor Act. United Industrial Workers of the Seafarers International Union of North American v. Board of Trustees of Galveston Wharves, 351 F. 2d 163 (5th Cir. 1965). As stated in the TWA agreement, it was negotiated "in accordance with the provisions of the Railway Labor Act, as amended..." The overall approach of the contract is carrier oriented, and, more importantly, there are provisions in the contract which make its application to Boeing of questionable legal validity. The TWA bargaining unit is a nation

wide unit which includes, together with other employees, individuals employed as guards. While this is permissible under the Railway Labor Act, Section 9(b) of the National Labor Relations Act, to which Boeing is subject, specifically prohibits the certification of any bargaining unit which contains, together with other employees, individuals employed as guards.

Further, Boeing is of the opinion that the TWA-IAM labor agreement, as it applies to the TWA employees performing services at the Cape, is illegal. This is based on the assumption that the Cape employees of TWA are not "employees” as that term is defined in the Railway Labor Act and they therefore would be subject to the National Labor Relations Act. If the Cape employees of TWA are not employees under the Railway Labor Act, any contract negotiated pursuant to the Railway Labor Act would not be applicable to them.

The Railway Labor Act defines an "employee" as:

"The term 'employee' as used herein includes every person in the services of a carrier (subject to its continuing authority to supervise and direct the manner of rendition of his service) who performs any work defined as that of an employee or subordinate official in the orders of the Interstate Commerce Commission now in effect, and as the same may be amended or interpreted by orders hereafter entered by the Commission pursuant to the authority which is hereby conferred upon it to enter orders amending or interpreting such existing orders. . ." (Emphasis added.)

Note that the question whether an individual is an employee subject to the Railway Labor Act depends upon whether the Interstate Commerce Commission has defined the work in question as that of an "employee." Boeing is not aware of any order of the Interstate Commerce Commission defining the work content of TWA employees at the Cape as that of an employee subject to the Railway Labor Act.

The National Mediation Board has adopted a simplistic test to determine whether an individual is an employee under the Railway Labor Act. That test is: 1. Is the employer a common carrier engaging in interstate commerce? 2. Does the individual perform any work as an employee?

3. If the answer to both questions is affirmative, the Railway Labor Act applies. The courts have refused to acceed to this approach. In National Council of Railway Patrolmen's Unions, AFL v. Sealor, 10 LC §62,880 (5 Cir. 1949), the Fifth Circuit Court of Appeals held that the status of an individual as an "employee" under the Railway Labor Act, when in doubt should be resolved by the Interstate Commerce Commission, not by the National Mediation Board. So far as Boeing is aware there has not been any determination by the Interstate Commerce Commission that the TWA employees at the Cape are employees within the meaning of the Railway Labor Act.

Of even greater significance is the fact that the Courts are of the opinion that employees performing work of a nature similar to that performed by the TWA employees are not employees under the Railway Labor Act. In Pan American World Airways v. United Brotherhood of Carpenters and Joiners of America, 324 F. 2d 217 (9th Cir. 1963), the question arose as to whether employees of Pan American performing operations at the Nuclear Research Development Station at Jackass Flats, Nevada, were subject to the Railway Labor Act. In rejecting the aforestated test of the National Mediation Board, the Court noted: "There are two quite different bodies of federal labor law, the law of the Railway Labor Act for railroad and airline employees, and the law of the National Labor Relations Act and the Fair Labor Standards Act for most other employees." The Court raised a hypothetical question-suppose the airline owned a shoe factory. Would its employees be subject to the Railway Labor Act? The Court then stated:

"An intent on the part of Congress to lift the employees of our hypothetical shoe factor, or of our actual Nuclear Research Development Station, out of the legal area occupied by most other workmen in the country who do exactly the same work under exactly the same conditions and surroundings, and place them, for employment relations purposes, in the 'state within a state' occupied by railroad and air transportation workers [The Railway Labor Act] would be so incongruous as to suggest that there must be some reason, though not readily apparent, why Congress entertained such an intent.

"Research of counsel has no such reason, and has left us facing the problem of whether a highly specialized and succinct set of labor laws tailor-made for employees engaged in transportation of persons and goods should be applied to

other employees having nothing whatever to do with the transportation of persons and goods. We do not have here a problem of determining whether the relationship of these employees to transportation is 'tenuous,' 'remote' or 'negligible.' In our case the relationship is nonexistent. If, then, these employees are governed by the Railway Labor Act, it is because Congress has said that they should be so governed. That is what Pan American urges. But our analysis of the pertinent statues earlier in this opinion convinces us that Congress has not said that so unequivocally as to leave no room for an interpretation of the statutes which will produce a reasonable, and not a merely arbitrary result." (Emphasis Supplied)

The Court further noted that the work performed by Pan Am employees at the Nuclear Research Development Station in Nevada was "substantially identical to" that performed by Pan American employees at Cape Canaveral, Florida. Recognizing that the National Mediation Board had asserted jurisdiction at Cape Canaveral-work substantially identical to that performed by Boeing and TWA employees at the Cape-the Court refused to follow the reasoning of the National Mediation Boad. In so deciding, the Court quoted from Northwest Airlines v. Jackson, 185 F. 2d 74 (8th Cir. 1950), in which the Court stated:

"The Railway Labor Act was intended to apply only to transportation activities and that work which bears more than a tenous, negligible and remote relationship to the transportation activities. It was not intended to apply to all work, regardless of its connection to transportation, merely because the company carrying on the work included carrier activities within its company functions." (Emphasis supplied.)

It should further be noted that the National Mediation Board did in fact assert jurisdiction over the Nevada employees of Pan American. The Court, refused to alter its conclusion that the Railway Labor Act was not applicable to the Nevada employees of Pan American. The Supreme Court of the United States denied certiorari. Pan American World Airways v. United Brotherhood of Carpenters, 376 U.S. 964 (S.Ct., 1964). Therefore, the conclusion must be reached that the TWA employees at the Cape are not subject to the Railway Labor Act and therefore cannot be considered under a contract negotiated "in accordance with the terms of the Railway Labor Act, as amended . . ." It logically follows that Boeing is not and cannot be a successor to a contract that cannot be legally applied to the employees in question.

2. As is pointed out in the accompanying exhibit, only the letter sent to NASA, on December 4, 1970 (Exhibit 1), there are other terms and conditions in the existing TWA-IAM labor agreement which could not be carried over to Boeing under the National Labor Relations Act. An example relating to the Union shop agreement is set forth in the attached letter. In addition, there is no arbitration procedure in the TWA-IAM agreement since it contemplated utilization and application of the provisions of the Railway Labor Act. Of course, under the John Wiley & Sons v. Livingston case, 55 LRRM 2769 (S.Ct. 1964), many of the vested provisions might have to be negotiated with the IAM unless the subject contract work is treated as an accretion to the existing bargaining unit. McGuire v. Humble Oil & Refining Company, 355 F. 2d 352 (2nd Cir. 1966). (This accretion matter is discussed in some detail later in this Memorandum.) Once the contract is firmed up then Boeing will be in a position to resolve this matter with the IAM who could be faced with preventing the employment of a large number of TWA employees (their own members) in order that the successorship question could be resolved without the necessity of a legal resolution through the NLRB, arbitration or the Courts. It certainly stands to reason that the IAM would agree to accept its existing contract with Boeing rather than to have to advise its TWA members at the Case that Boeing could not show favor to them in the employment process.

3. In this regard, serious question could be raised as to the authority of District Lodge 142 to represent employees of Boeing since this labor organization bargains solely for employees subject to the Railway Labor Act to the best of Boeing's knowledge. Boeing has been unable to obtain a copy of District Lodge 142's Charter which according to the International Constitution has its jurisdiction limited by the Executive Council (Article XXIV, Section 3). (Exhibit 2) In addition, in Section 1 of this same Article, a District Lodge is defined so that it apparently is applicable only to railroads, or air transport systems or industry in a certain locality. NASA could certainly request a copy of this District