Strike Not Averted: How Unions and Democrats Have Moved the Goalposts in Freight-Rail Dispute

Unions and their left-wing political enablers are playing a dangerous game — and it could end with an economy-crippling strike.

O n September 15, President Biden stood in the Rose Garden and spoke about the labor agreement his administration had brokered to avert a freight-rail strike. “This agreement is a big win for America,” he said. “And this is a win for tens of thousands of rail workers and for their dignity and the dignity of their work.”

But we could still see a strike. The unions don’t seem to agree with Biden’s assessment of the deal.

On October 10, the members of the third-largest rail union, the BMWED, rejected the deal the Biden administration celebrated. They agreed to maintain the status quo until November 19, at which point they would be free to strike. If just one of the twelve unions covered by national bargaining goes on strike, the others would be unlikely to cross a picket line, meaning the entire freight-rail network would shut down nationwide.

It’s not just one union anymore, though. On Wednesday, the members of the Brotherhood of Railroad Signalmen also rejected the tentative agreement. Sixty-one percent voted against it. The BRS has agreed to keep the status quo until early December.

The two largest unions — the heavy hitters who dragged out negotiations last month, SMART-TD and the BLET — will release their ratification-vote results on November 17. If they go the same way as the BMWED and BRS, a strike would become much more likely.

How Did We Get Here?

While carriers have been flexible and made numerous concessions throughout the process, unions and Democrats have consistently avoided resolving this conflict. These negotiations are over the five-year span from 2020 through 2024, and they began in November 2019. Three years should be enough time to come to an agreement.

After unions were not happy with the terms carriers were offering, they requested that the National Mediation Board, an independent federal agency, step in and help resolve the dispute. The NMB did so earlier this year. The NMB exists for this very purpose, and it has a reputation for fairness and thoroughness in its work.

On June 17, at unions’ request, the NMB released the parties from mediation after only two months of work. That’s a very short time compared to past mediation efforts. So long as the sides are in mediation, striking is illegal, and there’s no limit to how long mediation may last.

The vote on the three-member NMB was 2–1, with the two Democrats voting to release and the one Republican voting to continue mediation. The two Democrats are a former union president and a former Teamsters attorney. In other words, Democrats granted unions’ wish.

Once that wish was granted, a series of deadlines came into effect under the Railway Labor Act. The end of mediation started a 30-day cooling-off period. Once that period concludes, striking becomes legal, but the president can intervene and appoint a presidential emergency board (PEB) to make independent recommendations on how to resolve the dispute.

President Biden, to his credit, did that on July 18. He appointed experienced members to the board, and both the unions and the carriers believed them to be fair and neutral. The PEB had 30 days to do its work. It released its findings on August 17. That started another 30-day cooling-off period.

The carriers — who, remember, would have preferred to stay in mediation — nonetheless agreed to negotiate agreements with unions based on the PEB’s findings. It’s not as though the PEB gave the carriers what they wanted. The carriers wanted a 17 percent wage increase over the five years of the contract; the PEB recommended 24 percent, which would be the largest-ever increase under national bargaining. The carriers wanted to significantly restructure health benefits; the PEB recommended that they maintain the status quo, which is extremely generous compared to other industries.

Carriers consistently kept their word and during the cooling-off period made agreements based on the PEB report with nine of the twelve unions covered under national bargaining. But SMART-TD and the BLET held out. The report’s independent recommendations still weren’t good enough, even with the record wage increase. The unions then turned their focus to working conditions.

Working conditions are, in many cases, negotiated at the local level rather than the national level. There’s sense to that; carriers in the wide-open West have very different route networks than the denser Eastern carriers. The PEB recommended multiple times in its report that unions and carriers negotiate specific working-condition issues at the local level or through the arbitration process, rather than through national bargaining.

Sick leave became the centerpiece issue. As the strike deadline approached in mid September, Republican senators Richard Burr (N.C.) and Roger Wicker (Miss.) introduced a measure to implement the PEB recommendations through Congress, which is a legitimate path to a contract under the Railway Labor Act. It was used in 1992, the last time there was a rail strike.

But Bernie Sanders (I., Vt.) blocked the Burr–Wicker bill. “Right now, if you work in the freight rail industry . . . you are entitled to zero sick days,” Sanders said. That’s not true. Rail workers have different time-off policies than other industries, but they do receive substantial sick benefits, including 26 weeks of partial income replacement, 52 weeks of supplemental sickness benefits, and varying numbers of paid days off based on local negotiations. This was one of the issues the PEB recommended stay at the local level or be addressed through arbitration, so accepting a deal based on the PEB report still would have allowed unions the opportunity to gain more concessions later on.

In addition, rail workers already receive eleven paid holidays (which is two more than the average union employee and four more than the average transportation-sector employee in the U.S.). They also receive an average of three weeks of paid vacation. And the PEB recommended an additional day of paid personal leave for the national agreement, which the carriers agreed to.

But that still wasn’t enough for SMART-TD and the BLET. That’s how we got the eleventh-hour deal negotiated by Secretary of Labor Marty Walsh that led to the Rose Garden celebration with Biden. Walsh emerged triumphant after 20 hours of negotiations, where he served negotiators Italian food and coaxed them to agree in his trademark Boston way, the press reported.

Union leadership went along with the celebratory mood. The self-described “most pro-union president leading the most pro-union administration in American history” had brokered a deal that got the carriers to make yet another concession. The concession itself was reportedly minor — medical-care visits had to be scheduled 30 days in advance and could only be on Tuesday, Wednesday, or Thursday — but it was nonetheless significant that the issue was included in national bargaining at all. Unions would now have that issue on the table in future rounds of negotiation and would be able to chip away on a new margin for their members.

At this point, the deal went back to union membership for ratification votes, which is how we got the BMWED and BRS rejections. The flip-flopping from those unions’ leadership is something to behold.

On September 11, when the BMWED announced its tentative agreement according to the PEB’s recommendations, president Tony Cardwell said that the agreement would “put an end to the 65 year battle to bring BMWED Members travel allowances and away from home expenses to a rationally based structure.” It then sent the Biden-approved deal, which was the PEB deal plus more sick benefits, to members for ratification. After they rejected that deal, Cardwell said on October 10 that workers “resent the fact that management holds no regard for their quality of life.” BRS president Michael Baldwin said, “I have expressed my disappointment throughout the process in the lack of good-faith bargaining on the part of the [carriers],” even though he was present in the Rose Garden with Biden celebrating that very same deal only a few weeks before.

What More Could the Unions Want?

At nearly every step of this three-year process, carriers have compromised. They wanted to stay in mediation for longer. They agreed to the recommendations that came out of the PEB process that they would have preferred to avoid. They agreed to a larger wage increase than they wanted and status quo on health benefits when they wanted changes. They agreed to the Biden–Walsh-brokered deal on sick benefits. All of this was done in response to union demands in the hopes of bringing this yearslong saga to a close.

Unions have continued to move the goalposts time and again, and their progressive political allies have enabled them to do so. The only two moments when Republicans had any role in this process — the one member of the NMB and the Burr–Wicker resolution to implement an agreement — they were on the side of preventing a strike. The Democrats on the NMB set the deadlines in motion that led us here, and Bernie Sanders blocked the Burr–Wicker measure while saying on the Senate floor, “Rail workers have a right to strike.”

Rail workers have difficult jobs. That’s why they already have an average annual compensation, including benefits, of $135,700, putting them in the 93rd percentile of American workers. They have Platinum health benefits, which means that at least 90 percent of the cost of benefits covered by their plan is paid by the plan, and their employee-contribution rate is only 15 percent. They have special federal-retirement benefits under the Railroad Retirement System, which is in lieu of Social Security and far more generous. And they have a special national bargaining process wholly separate from the rest of U.S. labor law that lets them lock in 24 percent wage increases over five years with $1,000 annual bonuses. Most workers in other sectors have to get promotions or change jobs to see pay increases like that, but rail workers would get these raises for doing the same job they do now.

If that compensation package, plus the string of concessions from carriers that culminated in the Biden–Walsh deal, isn’t enough for unionized rail workers, any service disruption will be on them and the politicians who enable them. The carriers have basically said they’re done; they’ll agree to contracts aligned with the Biden–Walsh deal and aren’t giving any more concessions. It’s hard to blame them.