US faces possible rail strike as major union rejects labor deal

WHAT YOU NEED TO KNOW:

• A major rail union rejected the deal brokered by the Biden administration in September.
• Eight unions have signed on to the deal but all 12 have to vote to approve it.
• Unions and rail companies have to reach an agreement before Dec. 9 or a shutdown could paralyze the economy.

The agreement brokered by the White House in September seemed to avert a railroad strike at the time, but another deadline is looming just before the holiday season.

On Monday, SMART Transportation Division, which represents about 28,000 conductors, rejected the deal with 51% of union members voting against it. Meanwhile, the Brotherhood of Locomotive Engineers and Trainmen, which represents about 57,000 rail engineers, voted 53.5%-46.5% for ratifying the five-year agreement.

The deal has been approved by eight unions so far, but all 12 must sign on for ratification. In addition to SMART-TD, three smaller unions also voted to reject the deal.

SMART-TD’s president, Jeremy Ferguson, believes that the issue can be solved without a strike. He said that they will continue bargaining, but that it is now up to the railroad companies.

The current contract will end on Dec. 8. If an agreement is not reached before Dec. 9, railroad companies can lock out workers or SMART-TD can go on strike.

Such a shutdown will not only strain supply chains and paralyze the economy, but also disrupt transportation for passenger trains that operate on tracks owned by freight railroads.

Ian Jefferies, president and CEO of the Association of American Railroads (AAR), said “Congress should be prepared to act” in case the remaining unions do not sign on. He warned that a shutdown could lead to a “disastrous $2 billion a day hit to our economy.”

Jefferies added that rail companies “stand ready” to reach agreements with the unions but noted the fast-approaching deadline.

The AAR represents the country’s largest freight companies, including BNSF, Canadian National, CSX, Kansas City Southern, Norfolk Southern, and Union Pacific.

In September, President Joe Biden’s administration helped reach a tentative agreement between the railroad companies and workers’ unions.

Among the stipulations in the proposed contract are a 24% salary hike over five years, $5,000 bonuses, guaranteed time away and medical visits, no disruptions to current health care plans, voluntary assigned days off, and one additional paid day off.

The union leaders endorsed the deal, but their members still have to vote to approve it for it to become final.

The president hasn’t intervened since, but a White House official reiterated the president’s position that a shutdown is “unacceptable because of the harm it would inflict on jobs, families, farms, businesses and communities across the country.” The official continued, “The best option is still for the parties to resolve this themselves.”

Source: USA Today