Sep 12, 2022 - Economy

With rail strike looming, two unions are holding out

Illustration of an American flag with a railroad track being built on one of the stripes with little construction workers

Illustration: Sarah Grillo/Axios

Working conditions — more than pay demands — are holding up the resolution of a years long labor dispute between the nation's largest freight rail companies and their unions.

Why it matters: Their demands highlight how the pandemic deepened worker unrest. Beyond that, the possibility of a strike is now putting the nation's still recovering supply chain and economy at risk. A work stoppage would cost $2 billion a day, according to one estimate.

  • "We were forced to work through this pandemic. We had no extra compensation for that. We had to work around the clock, potentially exposing ourselves and our family and friends to the virus," a machinist who works for BNSF in the midwest tells Axios. (He declined to be identified, fearing retaliation from his employer.)
  • Already, the possibility of a strike has disrupted business. Amtrak canceled some trips on its routes, citing the possibility of disruption on the rails. And some rail companies stopped transporting certain hazardous materials, citing safety concerns.

What's happening: The two largest unions, which represent about half of all the railway workers, are holding out for better terms. The other 10 unions (representing the other half) have signaled support for the current deal.

  • Still, it's not clear if rank-and-file members, who still have to vote on the deal, would support it: "From what I see at the shop, it's an overwhelming 'no,'" says the machinist.
  • He noted that his employer doesn't offer workers any paid sick time; only unpaid time off (which comes with penalties for overuse). BNSF said in a statement that train crew get paid vacation and personal leave days.
  • While some close to the deal talks expressed optimism, others issued warnings: "I frankly think there's a high degree of likelihood that there is going to be a strike on Friday. And this will be unprecedented in our country's history," says one industry source, speaking on condition of anonymity as talks continue.

The holdouts: The Brotherhood of Locomotive Engineers and Trainmen, and The SMART Transportation Division say in statements that they need paid sick leave and better policies around work hours, before they sign onto the deal, according to a recent statement.

  • Workers are penalized — even fired — for taking sick time or visiting the doctor, the unions said in a joint statement Sunday. 

The other side: The industry emphasizes that workers have many ways to take off: "[A]ll railroads have policies designed to balance employees’ need to take time off with the need to maintain safe, ongoing operations," says the Association of American Railroads in a fact sheet about time off policy.

House Majority Leader Steny Hoyer (D-Md.) on Monday said Congress would step in if the parties fail to come to an agreement before a key deadline expires Friday.

  • Under federal law, Congress can intervene to halt a strike, which they did in 1986 and 1991, Bloomberg Law notes.
  • A range of business groups, including the Chamber of Commerce and the National Association of Manufacturers, are urging Congress to act. Even the Beer Institute, the trade association representing the nation's brewers, put out a statement.

Catch up quick: The deal on the table was detailed in August in a 119-page report from the the Presidential Emergency Board (PEB), a three-person panel appointed by the White House.

  • The board recommended a pay increase of 7% this year, as well as retroactive increases for the previous two years, and two more raises in 2023 and 2024 of 4% and 4.5%. Plus, an annual $1,000 "service recognition bonus."
  • The proposal would also offer one additional paid personal day.
  • As to the other working condition demands, the PEB said those are best negotiated by each union individually.
  • All the other parties appear to support this proposal, including the 10 unions that signaled support, the companies themselves and outside business groups. However, each union's members still need to vote on it.

Worth noting: There's currently a shortage of railway workers. The PEB's report says, freight rail employment declined from 117,00 in 2019 to 102,000 this year.

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