Eight of the twelve unions covered by ongoing labor negotiations have now reached tentative agreements, with a Friday deadline looming.
Eight of the twelve unions covered by ongoing labor negotiations have now reached tentative agreements, with a Friday deadline looming.
A s of Friday, five of the twelve freight-rail labor unions covered by ongoing negotiations had reached tentative deals with carriers to avoid a strike. Over the weekend, three more joined, bringing the total to eight. The cooling-off period under the Railway Labor Act ends on Friday, September 16, after which strikes become legal.
The BMWED, the International Brotherhood of Boilermakers, and SMART-MD announced deals with carriers on Sunday. The BMWED, representing maintenance-of-way workers, is the largest union so far to reach a tentative agreement, with about 24,000 members.
The agreements are in line with the independent recommendations from the presidential emergency board (PEB) report released in mid August. The report recommends a 24 percent wage increase over the five-year span currently under negotiation, which is from the start of 2020 to the end of 2024. Since over two and a half years of that span has already elapsed, workers would receive past years’ raises immediately, which would amount to roughly $11,000 for the average freight-rail worker.
Carriers said they would accept contracts based on the PEB report’s recommendations, even though they had wanted to grant only a 17 percent raise over the five years. Again, they kept their word, praising the three unions’ leadership while agreeing to the 24 percent raise.
In the PEB report, the BMWED was granted a significant win. The PEB recommended that a BMWED proposal to increase travel and meal allowances for workers be accepted.
That proposal was a big deal to the BMWED, which argued that the allowances had not been raised for many years and that some workers were paying out of pocket or sleeping in their cars while on the job. The tentative agreement includes the desired improvements, with union president Tony Cardwell saying, “It will put an end to the 65 year battle to bring BMWED Members travel allowances and away from home expenses to a rationally based structure.”
The only two unions larger than the BMWED, though, are still holding out.
The Brotherhood of Locomotive Engineers and Trainmen (BLET) and SMART-TD have yet to reach tentative agreements. (Note that SMART-TD, the transportation division, negotiates separately from SMART-MD, the mechanical division, which was one of the three most recent unions to reach an agreement.) Carriers made it clear in their statement announcing the most recent agreements that BLET and SMART-TD “continue to maintain positions that were expressly rejected by the PEB.”
Even if the other ten unions reach agreements, a strike by SMART-TD and the BLET would still lead to a nationwide shutdown. Carriers can’t run without their roughly 62,000 employees combined, and workers represented by other unions would be unlikely to cross a picket line. A nationwide shutdown would cost $2 billion per day.
Industry pressure to reach a deal has been increasing. Trade groups for fertilizer and agriculture have urged Congress to intervene if necessary to avoid a strike. Groups for short-line railroads and trucking have also urged the same, since they depend on the national freight railroads for their businesses to operate. The national freight railroads will start prioritizing sensitive shipments today, in anticipation of a possible strike, which could leave other less-sensitive shipments behind.
The deals unions have already reached are tentative only because they still must be ratified by a vote of each union’s membership. Writing in Railway Age, rail-labor-relations expert Frank Wilner speculates that the cooling-off period could be voluntarily extended past Friday to allow more time for ratification votes to play out. That would allow SMART-TD and the BLET to gauge the rank-and-file’s attitude toward the deals already brokered while continuing to negotiate their agreements. Carriers do not want to extend the cooling-off period, since the independent recommendations from the PEB are already known, and now eight unions have found them acceptable.
Wilner goes on to write:
Biden on Sept. 7 dispatched Labor Secretary Marty Walsh to a special mediation session hosted in Washington, D.C., by the National Mediation Board. Walsh’s message, although not made public, was blunt according to some of those present: Don’t mess with the nation’s fragile economy weeks ahead of mid-term congressional elections as neither Congress nor the Biden Administration will like it.
NMB-guided mediation will continue Sept. 8 and 9, and perhaps into next week, while both sides should expect phone calls from Walsh and other Biden Cabinet officers and congressional leaders urging statesmanship over confrontation.
There’s an inherent tension in those words coming from the Biden administration. Biden has promoted himself as “the most pro-union president leading the most pro-union administration in American history.” He gave a rousing speech to the AFL-CIO’s convention in Philadelphia in June. Walsh is a former union president. It’s not a secret which side Biden is on in disputes between labor and management.
Yet, now that serious economic consequences right before a midterm election are at stake, Biden is sending Walsh to urge “statesmanship over confrontation.” Unions were itching for a fight, holding rallies over the weekend in Nebraska and Ohio. They could view Walsh’s message as encouragement to settle for a subpar deal. A 24 percent raise over five years, which SMART-MD noted in its statement is the largest ever under national bargaining, certainly doesn’t seem half bad. But SMART-TD and the BLET continue to drag their feet.
If Walsh is now attempting to backpedal from the administration’s earlier rabble-rousing rhetoric, union leadership might be doing the same. SMART-TD and the BLET have sought to correct misinformation spreading among members about the contents of the PEB report, in an effort to portray the recommendations more positively. SMART-TD has also reminded its members that strike benefits are only $100 per day and members could be cut off from health benefits or stranded across the country when a strike begins.
As these negotiations have gone on for over two years now, unions have whipped up their membership and been boosted by the unequivocally pro-union Biden administration. Both union leadership and Democrats may come to regret that if a freight-rail strike cripples the economy.