B-126868, DEC. 10, 1963

B-126868, DEC. 10, 1963

TO THE SECRETARY OF THE INTERIOR:

ON OCTOBER 31, 1963, YOUR ADMINISTRATIVE ASSISTANT SECRETARY REQUESTED OUR DECISION CONCERNING THE PROPRIETY OF FURNISHING FREE QUARTERS TO SECTION LABORERS OF THE ALASKA RAILROAD WHOSE WAGE RATES ARE NEGOTIATED UNDER EXISTING LABOR AGREEMENTS WITH EMPLOYEE REPRESENTATIVES. THE SPECIFIC QUESTIONS PRESENTED BY THE ADMINISTRATIVE SECRETARY ARE WHETHER:

"/1) THE ALASKA RAILROAD MAY ELIMINATE CHARGES TO SECTION LABORERS FOR GOVERNMENT QUARTERS FURNISHED TO SUCH EMPLOYEES, BASED ON THE EXISTING PRIVATE RAILROAD PRACTICES COVERING EMPLOYMENT CONDITIONS, OR

"/2) THE ALASKA RAILROAD MAY NEGOTIATE THE REASONABLE VALUE OF QUARTERS FURNISHED WITH EMPLOYEE REPRESENTATIVES, WITHOUT REGARD TO THE SPECIFIC CRITERIA IN BUDGET CIRCULAR A-45, AND WITH THE OBJECTIVE OF REACHING EQUITABLE WAGE SETTLEMENTS FOR THE EMPLOYEES AFFECTED.'

SECTION 1 OF THE ALASKA RAILROAD ACT, AS AMENDED, 48 U.S.C. 301 (A), AUTHORIZES THE PRESIDENT ,TO EMPLOY SUCH OFFICERS, AGENTS OR AGENCIES, IN HIS DISCRETION, AS MAY BE NECESSARY TO ENABLE HIM TO CARRY OUT THE PURPOSES" OF THE ACT, AND "TO FIX THE COMPENSATION OF ALL OFFICERS, AGENTS OR EMPLOYEES APPOINTED OR DESIGNATED BY HIM.' SECTION 1 OF THAT ACT ALSO AUTHORIZES THE PRESIDENT TO REQUIRE SUCH OFFICERS, AGENTS, OR AGENCIES TO PERFORM ANY OR ALL OF THE DUTIES IMPOSED BY HIM UNDER THE TERMS OF THE ACT.

PURSUANT TO SUCH AUTHORITY THE PRESIDENT ISSUED EXECUTIVE ORDER NO. 11107, APRIL 25, 1963, SECTION 1 OF WHICH IS AS FOLLOWS:

"GENERAL RESPONSIBILITY FOR RAILROAD. THE SECRETARY OF THE INTERIOR IS AUTHORIZED TO OPERATE THE RAILROAD OR RAILROADS, BRANCH LINES, FEEDERS AND TELEGRAPH AND TELEPHONE LINES INCIDENT THERETO, CONSTRUCTED OR ACQUIRED UNDER THE ACT OF MARCH 12, 1914, OR ACTS SUPPLEMENTAL THERETO, IN ALL RESPECTS AND TO ALL INTENTS AND PURPOSES AS IF THE OPERATION THEREOF HAD BEEN PLACED BY LAW UNDER THE JURISDICTION OF THE SECRETARY OF THE INTERIOR, EXCEPT THAT THE AUTHORITY OF THE SECRETARY UNDER THIS ORDER "TO FIX, CHANGE, OR MODIFY RATES FOR THE TRANSPORTATION OF PASSENGERS AND PROPERTY" SHALL BE SUBJECT TO THE AUTHORITY OF THE INTERSTATE COMMERCE COMMISSION UNDER SECTION 3 OF THIS ORDER.'

SIMILAR AUTHORITY--- INSOFAR AS HERE IS MATERIAL--- WAS CONFERRED UPON THE SECRETARY OF THE INTERIOR BY EXECUTIVE ORDER NO. 3861, JUNE 8, 1923, WHICH WAS SUPERSEDED BY EXECUTIVE ORDER NO. 11107, ABOVE.

UNDER THE CONTROLLING STATUTORY AUTHORITY AS IMPLEMENTED BY EXECUTIVE ORDER NO. 11107, THE SECRETARY OF THE INTERIOR IS VESTED WITH BROAD AUTHORITY WITH RESPECT TO THE FIXING OF COMPENSATION OF THE ALASKA RAILROAD EMPLOYEES. IT IS NOTEWORTHY THAT SECTION 202 (14) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1082 (14), EXCEPTS THE ALASKA RAILROAD FROM THE SCOPE OF THAT ACT. THUS, NEITHER THE ALASKA RAILROAD ACT, THE CLASSIFICATION ACT OF 1949, NOR ANY OTHER STATUTE OF WHICH WE ARE AWARE, PRESCRIBES THE MANNER OF FIXING THE COMPENSATION RATES OR PLACES LIMITATIONS UPON THE COMPENSATION YOU MAY FIX FOR SECTION LABORERS (HOURLY RATE EMPLOYEES) OF THE ALASKA RAILROAD. THEREFORE, WHILE WE DO NOT REGARD EXECUTIVE ORDER NO. 10988, AS AUTHORITY TO NEGOTIATE REGARDING ELEMENTS OF COMPENSATION, NEITHER DO WE FIND THAT THE HISTORICAL POLICY FOLLOWED BY THE ALASKA RAILROAD IN NEGOTIATING WAGE RATES TO ACCORD WITH THOSE OF PRIVATE RAILROADS, NECESSARILY EXHAUSTS THE STATUTORY POWER DELEGATED TO THE SECRETARY OF THE INTERIOR TO NEGOTIATE OTHER OR DIFFERENT RATES.

SECTION 3 OF THE ACT OF MARCH 5, 1928, 5 U.S.C. 75A, IS AS FOLLOWS:

"CIVILIANS EMPLOYED IN FIELD SERVICE; QUARTERS, HEAT, LIGHT, HOUSEHOLD EQUIPMENT, SUBSISTENCE AND LAUNDRY SERVICE. THE HEAD OF AN EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT, WHERE, IN HIS JUDGMENT, CONDITIONS OF EMPLOYMENT REQUIRE IT, MAY CONTINUE TO FURNISH CIVILIANS EMPLOYED IN THE FIELD SERVICE WITH QUARTERS, HEAT, LIGHT, HOUSEHOLD EQUIPMENT, SUBSISTENCE, AND LAUNDRY SERVICE; AND APPROPRIATIONS OF THE CHARACTER USED BEFORE MARCH 5, 1928, FOR SUCH PURPOSES ARE MADE AVAILABLE THEREFOR: PROVIDED, THAT THE REASONABLE VALUE OF SUCH ALLOWANCES SHALL BE DETERMINED AND CONSIDERED AS PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS.'

THE PROVISO APPEARING IN SECTION 3, QUOTED ABOVE, REQUIRES THAT THE REASONABLE VALUE OF PUBLIC QUARTERS FURNISHED WITHOUT CHARGE TO EMPLOYEES BE CONSIDERED AS PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH EMPLOYEES. WE UNDERSTAND THAT BECAUSE OF SUCH QUOTED PROVISO, THE SECTION LABORERS TO WHOM YOUR DEPARTMENT'S SUBMISSION APPLIES, HAVE BEEN AND PRESENTLY ARE BEING CHARGED FOR THE PUBLIC HOUSING FURNISHED THEM SINCE THEIR COMPENSATION RATE FIXED UNDER A WAGE AGREEMENT NEGOTIATED IN THE HISTORICAL METHOD DOES NOT TAKE INTO CONSIDERATION THE VALUE OF THE HOUSING FURNISHED.

THUS, IF FREE QUARTERS NOW ARE FURNISHED THE SECTION LABORERS IN QUESTION, THE EFFECT WOULD BE TO SUPPLEMENT THEIR COMPENSATION CONTRARY TO THE EXISTING LABOR AGREEMENT. UNDER THE CIRCUMSTANCES THE PROVISO TO SECTION 3 OF THE ACT OF MARCH 5, 1928, WOULD REQUIRE AN APPROPRIATE REDUCTION IN THEIR COMPENSATION.

HOWEVER, IT WOULD BE APPROPRIATE WHEN NEGOTIATIONS FOR A NEW WAGE AGREEMENT ARE OPENED TO NEGOTIATE THE WAGE RATE PAYABLE TO SECTION LABORERS EQUAL TO THE COMPENSATION RATES PAYABLE BY PRIVATE RAILROADS PLUS THE REASONABLE VALUE OF GOVERNMENT QUARTERS FURNISHED THEM. SUCH A RATE WOULD BE REDUCIBLE BY THE REASONABLE VALUE OF QUARTERS FURNISHED AND THE NET COMPENSATION WOULD EQUAL THE RATE PAID BY PRIVATE RAILROADS.

WHILE THE SPECIFIC QUESTIONS PRESENTED BY YOUR ADMINISTRATIVE ASSISTANT SECRETARY MUST BE ANSWERED IN THE NEGATIVE, SUCH ANSWERS DO NOT PRECLUDE THE LAWFUL ATTAINMENT OF THE OBJECTIVE SOUGHT TO BE REACHED.