Former Conrail Inc. workers have reached the end of the line in their efforts to get a share of a $500 million-plus employee stock ownership plan surplus. Several thousand former railroad workers had contended they were entitled to a share of the surplus ESOP assets when the company was broken up and sold to Norfolk Southern Corp. and CSX Corp. in 1997. The surplus arose when the company was acquired at a premium over the stock price at which the ESOP had acquired the shares. The U.S. Supreme Court refused to hear the appeal and let stand a lower court's decision that the workers got everything they were promised.
"I continue to believe and will always believe (Conrail) was both wrong from a moral sense, and from the standpoint of the law. It's just one more example of how dedicated employees get punished for their loyalty," said Alan Sandals, founding partner of Sandals, Langer & Taylor LLP, Philadelphia, who represented the employees. But Brian Ortelere, a partner in the Philadelphia law firm of Pepper Hamilton LLP, which represented Conrail, said he was not surprised by the decision, after a separate ruling that companies do not have to share pension fund surpluses with plan participants.