Biden issues Executive Order focused on resolving rail carrier and labor differences

In an effort to quell further supply chain disruptions, President Joe Biden signed an Executive Order (EO) late last week to establish a Presidential Emergency Board (PEB) focused on resolving a labor dispute between Class I rail carriers and 12 U.S.-based rail labor unions on reaching labor accord. The establishment of the PEB went into effect on July 18.

The White House said that the objective of the PEB is to provide a structure for railroad workers and management to resolve their disagreements, with the PEB investigating the dispute and delivering a report with recommendations on how the dispute should be resolved within 30 days of the establishment of the PEB.

At the heart of the matter—and the need for the PEB—are existing disputes between certain railroads represented by the National Carriers’ Conference Committee (NCCC) and their employees represented by certain labor organizations, noted President Biden in the EO.

“I have been notified by the National Mediation Board (NMB) [an independent U.S. federal government agency that facilitates labor-management relations within the nation’s railroad and airline industries] that in its judgement these disputes threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service,” said President Biden.  

Leading up to the White House EO was a June 17 announcement made by the National Mediation Board, confirming that “pursuant to the Railway Labor Act, the National Carriers’ Conference Committee (NCCC) and the twelve unions…were released by the NMB from statutory Mediation on June 17, 2022, and a 30-day cooling-off period [began] on June 18, 2022.” NMB added that as part of an initiative to help the parties in reaching agreements, it is scheduling public interest meetings, which are set to begin on July 12. 

The 12 U.S.-based rail labor unions include: the American Train Dispatchers Association (ATDA), Brotherhood of Locomotive Engineers and Trainmen (BLET), Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED), Brotherhood of Railroad Signalmen (BRS), International Association of Machinists and Aerospace Workers (IAMAW), International Brotherhood of Boilermakers, Iron Ship Builders, Forgers and Helpers (IBB), International Brotherhood of Electrical Workers (IBEW), National Conference of Firemen & Oilers, District of Local 32BJ, SEIU (NCFO), International Association of Sheet Metal, Air, Rail and Transportation Workers – Railroad, Mechanical and Engineering Department (SMART-MD), International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD), Transportation Communications Union/IAM (TCU/IAM), and the Transport Workers Union of America (TWU).

In early July, prior to the White House EO, National Retail Federation (NRF) President and CEO Matthew Shay wrote that the current rail labor situation, in the wake of the NMB’s recent decision, has the potential for additional supply chain disruptions, adding that NRF and its members are concerned about the current status of negotiations and the potential for system-wide disruption in September, when Peak Season is in full swing and tied to back-to-school and holiday shopping.

“NRF and its members are concerned about the potential for U.S. freight rail disruptions stemming from the National Mediation Board’s premature release of the parties from labor negotiations,” wrote Shay. “We urge the administration to encourage the parties to come back to the table where they can make their own fair and mutually beneficial agreement. Intermodal rail shipments have been the largest source of rail traffic over the past few years, and an overwhelming portion of those movements are tied to consumer goods. In the first part of 2021, railroads moved the most intermodal goods ever, and while such movements are down this year, they remain at a high level.”

In a statement provided to LM, the Association of American Railroads (AAR) said that railroads and their invaluable employees are best served when parties reach agreements voluntarily.

“The industry remains committed to doing so, including by rewarding employees with highly competitive compensation and benefits,” said AAR. “We hope all parties will work together to avoid any potential disruptions, including policymakers to the extent they are involved.”

Anthony B. Hatch, principal of New York-based ABH Consulting, explained that chances of a railway strike are not likely to come to fruition.

“The very system is designed to prevent it; in the unlikely event I am wrong, any work stoppage will be very short,” he noted. “The outcome is, of course—will rails be allowed to further deploy technological advancement, crew (size) consist, wage inflation, etc.; and the political/economic/employment timing (as at the ports) couldn’t be worse for productivity and progress as rails try to stand up to government support for AV/EV competition.”