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On the eve of the holiday season, workers at the heart of the supply chain are once again threatening to strike.

Four freight rail unions, with a combined membership of close to 60,000 rail workers, have voted down the five-year contract agreement brokered by the Biden administration back in September. The latest rejection came Monday from the largest of the unions, representing some 28,000 conductors, brakemen, and yardmen.

Eight other unions have ratified the deal, but they too could be pulled back into this labor dispute. That's because if one union decides to strike, all of the unions, representing about 115,000 freight rail workers, will honor the picket lines.

Such a move would bring not just freight trains, but some Amtrak and commuter rail systems that operate on tracks owned by the freight railroads, to a halt.

Roughly 30% of freight moves by rail in the U.S. — everything from chlorine to corn to cars. The Association of American Railroads estimates that a nationwide rail shutdown could cost the country $2 billion a day in lost economic output.

The two largest rail unions split on contract vote

In September, the two largest rail unions, SMART Transportation Division and the Brotherhood of Locomotive Engineers and Trainmen, came to Washington to try to resolve their differences with the railroad companies.

A marathon negotiation session led by U.S. Labor Secretary Marty Walsh yielded a deal that the union leaders thought their rank-and-file would accept. 

The deal gave workers a 24% raise over five years, an additional personal day and caps on health care costs. It also includes some modifications to the railroads' strict attendance policies, allowing workers to attend to medical needs without facing penalties for missing work.

President Biden described it a win for all sides and the U.S. economy. The railroads called it the most generous contract in modern history and noted that upon ratification, workers would see an average payout of $16,000 in back raises and bonuses.

But the workers still had to vote on the contract. On Monday, the ballots from the two largest unions were tallied. 

The Brotherhood of Locomotive Engineers and Trainmen, representing roughly 23,000 workers, voted to ratify the deal with 53.5% of the vote.

But SMART Transportation Division, representing 28,000 conductors, brakemen, yardmen and others, rejected the agreement, with 50.87% voting no.

"SMART-TD members with their votes have spoken, it's now back to the bargaining table for our operating craft members," said SMART-TD President Jeremy Ferguson in a 

. "This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers and the American people." 

Deadline for an agreement is December 8th

SMART Transportation Division and three other unions who previously rejected the contract deal now return to the bargaining table. If no agreement is reached by December 8, two things could happen as early as 12:01 a.m. on December 9: The railroads could lock workers out, or workers could go on strike.

The Association of American Railroads says the rail companies stand ready to reach new deals based on the original framework presented by President Biden's emergency board, but warned that the window for coming up with an agreement was narrowing.

"Let's be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy," said AAR President and CEO Ian Jefferies in a statement.

Congress has the power to intervene if workers strike

Should there be a strike, Congress would likely intervene within hours. The Railway Labor Act allows Congress to take any number of measures to get trains running again — including imposing some version of the contract or extending the status quo, kicking any decision to the next Congress.

At a series of town hall meetings over the last month, union leaders refrained from telling engineers and conductors how to vote but warned that if they rejected the contract in favor of a strike, the matter would be out of their hands.

"Make your own decisions," Dennis Pierce, national president of the Brotherhood of Locomotive Engineers and Trainmen, said at a town hall in Independence, Ohio, on November 9. "But the idea that [Congress] will let us shut down the nation's economy for any length of time I don't think is likely."

Paid sick leave, attendance policies are still big sticking points

The unions acknowledge that the agreement sent to the rank-and-file to vote on fell short of what they'd hoped for. While the deal did include substantial raises that puts workers slightly ahead of inflation, it did not deliver any paid sick days, a major disappointment to workers after carrying the railroads through the pandemic. 

The unions were able to secure some protections for workers from the strict attendance policies employed by a couple of the railroads. Under the deal, workers can miss work to attend to medical issues without being assessed disciplinary points, but there are limitations and the time off is unpaid.

Additionally, the agreement stipulates that unions can negotiate for more regular schedules for engineers and conductors who are essentially on call around the clock. The unions say this is a big win for workers and would constitute a major quality-of-life improvement.

Meanwhile, two unions that voted down the contract last month — the Brotherhood of Maintenance of Way Employees and the Brotherhood of Railway Signalmen — are still holding out for paid sick leave. They've argued that railroad workers should receive the same amount that federal contractors are mandated to provide — 56 hours — but say they'll make a deal with less than that.

Unions are also exploring other paths to securing paid sick leave, including through executive order, SMART-TD president Ferguson told workers at a town hall earlier this month.

Business and Economic News

Andrea Hsu

Author

The rail union representing 28,000 freight rail conductors, brakemen and yardmen has voted down the contract deal brokered by the Biden administration back in September.

Largest rail union rejects contract, stoking fears of a strike

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