Norfolk Southern: Ancora's union deal violates Railway Labor Act

Editor's note: This story has been updated with a response from Ancora Holdings Group LLC.

Norfolk Southern Corp. today issued a statement after being made aware that Ancora Holdings Group LLC negotiated and signed an "unauthorized" memorandum of understanding (MOW) with the Brotherhood of Locomotive Engineers and Trainmen (BLET).

The agreement purports to offer specific concessions by NS to the BLET in exchange for the union’s support of Ancora's efforts to gain control of the company's board and replace current President and CEO Alan Shaw, NS officials said in a press release.

Ancora's negotiations and subsequent MOA undermines NS' bargaining process in violation of the Railway Labor Act, NS claims.

"Ancora's actions are a blatant attempt to buy votes through backdoor deals to take control of the company. This desperate effort by Ancora, if successful, provides concessions to the BLET that limit operational flexibility and destroy significant value for the company," NS leaders said in their statement.

To read the full NS statement, click here.

Ancora today called the NS statement a "stunt" and that NS' claims are "meritless."

"We're proud that our independent nominees could align with unions on non-binding concepts and non-binding principles for how underserved workers should be treated, especially in the wake of recent dangerous accidents," Ancora's response stated. The entire response can be read here.

The BLET, which represents engineers and trainmen at NS, initially supported NS leadership in their efforts to maintain control of the board against Ancora's proxy fight. But late last week, the BLET reversed its position and announced it supports Ancora's proposal.

"BLET’s three elected general chairmen representing locomotive engineers and trainmen at Norfolk Southern met with Ancora’s leadership team yesterday and determined that they are the right leaders for Norfolk Southern moving forward," BLET National President Edward Hall said in a press release.

Also late last week, the the Brotherhood of Maintenance of Way Employes Division-International Brotherhood of Teamsters (BMWED-IBT) announced its support for the proposal by Ancora, a major shareholder in NS. Following the BLET and BMWED-IBT announcements, a coalition of other unions issued what they called a "warning" that Ancora's proposed strategy for NS will jeopardize safety and service improvements at the Class I.

Meanwhile, Ancora today announced that Glass Lewis, a proxy advisory service, has recommended that investors elect six of Ancora's independent nominees at NS, including proposed CEO Jim Barber.

Shareholders will decide the Class I's future leadership at their annual meeting on May 9.