Railroad Strike Averted (For Now)

After some cajoling from the Biden Administration and an all-night negotiating session, the leaders of the remaining holdout railroad unions joined with the nation’s freight railroads in agreeing on new contract terms for their workers yesterday morning, avoiding a nationwide railroad service disruption that would otherwise have taken place starting today. (No one is quite sure if it would have been a strike by the unions or a lockout by the railroads.)

The final deal, between the Brotherhood of Locomotive Engineers and Trainmen (BLET), the SMART-TD union that took over from UTU and, and the Brotherhood of Railroad Signalmen and the coalition of freight railroads, was reached just before 6 a.m.  At a Rose Garden press event a few hours later, President Biden said “…this is a win for tens of thousands of rail workers and for their dignity and the dignity of their work.  It’s a recognition of that…because of the labor agreement, those rail workers will get better pay — a 24 percent wage increase over the next five years, improved working conditions, peace of mind around their healthcare by capping the cost that workers will have to pay.”

But the agreement must now be ratified by rank-and-file union members who were all heated up and ready to strike. (SMART-TD said they took a poll of their members and close to three-quarters wanted to strike.)

As the crisis point approached, Amtrak was already canceling its trains outside the Northeast Corridor, which run on tracks signaled and operated by freight railroads. And shippers were bracing for shutdowns and disruptions.

This was shaping up to be a terrible pre-election economic disaster. But, as Frank Wilner with Railway Age pointed out at the time, the Democratic members of the National Mediation Board stretched its own procedure in mid-July precisely so they could start a clock that would set a strike deadline in mid-September – after Congress was back from the August recess but still painfully close to the midterm elections. But the unions and the NMB members did not know – could not have known – that the Presidential Emergency Board appointed by Biden as the middle part of that three-month process would issue recommendations that the unions would hate so much.

Forcing the PEB report on both sides is the path of least resistance for Congress for settling disputes under the Railway Labor Act. After some initial back-and-forth, it became clear that the railroads would be perfectly happy if the entirety of the PEB recommendations were forced upon them. The railroad unions, not so much, so they (over the last week) tried to make the dispute all about sick leave, saying that they had none.

(The PEB report makes clear that, under present rules, employees do get some multi-purpose non-vacation leave that they can use (it’s just not called sick leave) and that many of the unions have previously negotiated Supplemental Sickness Benefit Plans instead of sick leave.) The unions were demanding paid 15 sick days per year, and the ability to roll unused sick leave over into subsequent years. The railroads said that 15 extra days would cost $688 million per year and would be the equivalent of an additional 6.4 percent pay increase on top of the 24 percent already in the PEB recommendation.

The PEB said that “We are simply not in agreement that this sick leave proposal is otherwise warranted or is the appropriate way to address the concerns,” but they did recommend one additional day of personal leave each year.

The union dissatisfaction with the PEB recommendations made it effectively impossible for Congress to force an end to the dispute on terms the railroad wanted. (The only way a bill would pass Congress would be if it embodied the PEB recommendations, which were, after all, the recommendations of the President’s board.) Senators Richard Burr (R-NC) and Roger Wicker (R-NC) tried to get the Senate to pass their legislation (S. J. Res. 61) Wednesday afternoon to do just that – impose a settlement based on the PEB on both sides – but Sen. Bernie Sanders (I-VT) blocked the unanimous consent request necessary to take up the bill. Or else, Congress could do what they did in 1992 and force binding, baseball-style, last-best-offer arbitration.)

Social media takes and talking points over the last few days from the unions and their allies were all about the sick leave issue.

The final deal does, in fact, give employees sick days –  but only one day per year, per the Washington Post. Will this be enough to get angry employees to vote to ratify the deal in a few weeks?

If not, Congress may have to wind up forcing a settlement – either the PEB, or baseball arbitration – on the railroads and their unions anyway.


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