Major U.S. freight rail operators and the unions representing over one hundred thousand rail workers reached a tentative deal to avoid a strike that could have started as early as Friday.

The tentative agreement, reached between 13 unions representing workers across the rail industry and the Class I freight rail operators, includes a 24 percent wage increase during a five-year period from 2020 through 2024, including an immediate payout to rail employees on average of $11,000 once the deal is ratified.

The agreement also included an extension to existing employee health care networks, the creation of voluntary assigned days off for employees in thru freight service, an additional paid day off for every employee represented by the unions, and exemptions to carrier attendance policies for routine and preventive medical care.

More information regarding terms of the deal can be found here.

“Our members rely on about 27 million bushels of corn and 11 million bushels of soybean meal every week to feed their chickens. Much of that is moved by rail,” NCC President Mike Brown said on Thursday. “Any disruption of service could negatively impact the welfare of the birds, and ultimately impact production at a time when Americans are already dealing with record food inflation. We are pleased to see a tentative deal has been reached and look forward to its swift approval.”

The final negotiations, which are the culmination of years of talks between the unions and the carriers, played out at the Department of Labor in Washington, D.C. with U.S. Secretary of Labor Marty Walsh and White House staff in attendance.

President Biden in July created an emergency mediation board known as a Presidential Emergency Board (PEB) to further talks along. Under the Railway Labor Act, the President may exercise discretion to create this type of board when a labor dispute threatens “to substantially interrupt commerce to a degree such as to deprive any section of the country of essential transportation service.”

The creation of the PEB temporarily prevented a strike at the time, and the PEB quickly submitted recommendations for terms of a final deal, but two of the 13 unions did not agree to the PEB recommendations and one other union (International Association of Machinists and Aerospace Workers, IAM) conducted a formal vote on Wednesday against the terms of the deal during the final negotiations.

The final negotiations in Washington primarily were between these two holdout unions – the Brotherhood of Locomotive Engineers and Trainmen (BLET), a division of the Rail Conference of the International Brotherhood of Teamsters, and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) – and the National Carriers’ Conference Committee (NCCC). The NCCC represents most Class I rail operators including BNSF, Union Pacific, Norfolk Southern, CSX, Kansas City Southern, and the U.S. operations of Canadian National.

The unions were not allowed to strike before Friday under federal law that governs railroad contract negotiations between unions and Class I railroads.

If the unions and carriers were unable to reach a tentative agreement before Friday, many groups in Washington called for Congress to pass legislation averting a strike. NCC on Tuesday joined dozens of agricultural groups in a letter to Congressional leadership urging immediate action to prevent a strike.

“Railroads and rail labor have until 12:01 a.m. on September 16 to reach a labor agreement that would prevent a lockout or strike,” the letter said. “We continue to urge these negotiators to remain at the table and work in good faith to come to an agreement. However, should the parties not be able to come to terms, the undersigned members of the Agricultural Transportation Working Group (ATWG) and other food and agriculture industry partners implore Congress to remain in session and act immediately to prevent a rail strike or lockout to avoid significant economic damage to U.S. supply chains and further uncertainty for rail customers.”

The full letter can be found here.

Terms of the deal must now be approved through ratification votes over the next few months. All 13 of the unions, including the two holdouts (BLET, SMART-TD) and the union that rejected an earlier version of the deal in a formal vote Wednesday (IAM), will now conduct votes on the deal announced Thursday. IAM has indicated it would like to continue negotiating up until its self-imposed September 29 deadline, before bringing a deal to a ratification vote.

Two of the unions have already approved the deal: the Transportation Communications Union and the Brotherhood of Railway Carmen.

 

 

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