Freight railroad strike avoided with the Senate following the House’s lead on key legislation

On the heels of the U.S. House of Representatives signing off on legislation aiming to quell the impasse between the remaining railroad labor unions that had yet to ratify terms of the tentative agreement outlined by President Biden’s Presidential Emergency Board’s (PEB) tentative agreement, the United States Senate followed suite yesterday, preventing a freight railroad labor strike that, had it occurred, could have cost the nation’s economy upwards of $2 billion per day.

President Joe Biden signed the legislation into law today.

“I want to thank Congress—Democrats and Republicans—for acting so quickly,” said Biden prior to signing the bill. “I know this was a tough vote for members of both parties, it was a tough [vote] for me. But it was the right thing to do at the moment, to save jobs, to protect millions of working families from harm and disruption and to keep the supply chains stable around the holidays.”

As previously reported, these agreements were based on recommendations made by Presidential Emergency Board (PEB) appointed by President Biden, which were released on August 16, and include a 24% wage increase over the five-year period from 2020 through 2024, coupled with a 14.1% wage increase that is effective immediately, as well as five annual $1,000 lump sum payments, with the National Carriers’ Conference Committee (NCCC), an organization representing the nation’s freight railroads in national collective bargaining, noting that a portion of the lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership. A major source of contention between the unions yet to ratify this agreement and the freight railroads focused on sick leave and shift scheduling, as well as staffing shortages and related issues.

At the time of the House passing legislation, eight of the 12 railroad labor groups had fully ratified terms of the tentative agreement and nine of 13 contracts were already ratified (as SMART-TD has two separate contracts). The holdovers were: Brotherhood of Railway Signalmen (BRS), the last union yet to ratify terms of the tentative agreement, joining SMART-TD (for one of its contracts), BMWED (Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters), and IBB (Iron Ship Builders, Forgers and Helpers).

The clock was ticking on passing legislation, with a December 9 deadline to strike an agreement was looming.

On Wednesday, November 30, the House signed off on H.J. Res. 100, whose objective is to “provide for a resolution with respect to the unresolved differences between certain railroads represented by the National Carriers’ Conference Committee of the National Railway Labor Conference and certain of their employees,” according to the bill’s text.

The bill was introduced by Rep. Donald Payne (D-NJ), Chairman of the House Subcommittee on Railroads, Pipelines, and Hazardous Materials.

The House also signed off on H. Con. Res. 119, which provides for a correction in the enrollment of H.J. Res. 100, and was introduced by Rep. Peter DeFazio (D-OR), Chair of the House Committee on Transportation and Infrastructure, but it did not pass in the Senate. 

H.J. Res. 100 then headed to the Senate, whom approved on the implementation of the PEB’s terms of the tentative agreement.

The text for H. Con. Res. 119 calls for seven days of paid sick leave annually for railroad employees, “regardless of whether such days are provided under a tentative agreement, side letter, or local carrier agreement or under an existing labor agreement,” and “will not result in any points, demerits, or disciplinary action under any party’s attendance policy.”

The Association of American Railroads (AAR) soundly endorsed the Senate’s vote, with AAR President and CEO Ian Jefferies noting that the Senate acted with leadership and urgency with yesterday’s vote to avert an economically devastating rail work stoppage.

“As we close out this long, challenging process, none of the parties achieved everything they advocated for,” he said. “The product of these agreements is a compromise by nature, but the result is one of substantial gains for rail employees. More broadly, all rail stakeholders and the economy writ large now have certainty about the path forward. Let’s be clear railroading is tough, essential work that keeps our nation moving, and our employees deserve our gratitude for moving America’s freight and doing so safely every day. The gains in this agreement are significant, including historic wage increases, best in class healthcare, and meaningful progress in creating more predictable, scheduled work shifts. Without a doubt, there is more to be done to further address our employees’ work-life balance concerns, but it is clear this agreement maintains rail’s place among the best jobs in our nation.”

AAR also highlighted various aspects of the legislation, including how it:

• Provides a 24 percent wage increase during the five-year period from 2020 through 2024, including an immediate payout on average of $16,000 upon ratification;
• Includes $5,000 in performance bonuses, with total average annual pay and benefits reaching $160,000 by the end of the contract period;
• Maintain some of the best healthcare plans in the nation;
• Provide an additional paid personal leave day per year; and
• Continues to provide multiple options for time off and, for those employees who operate trains, the agreements include enhanced abilities to schedule time off and local agreements to be finalized after ratification of the national agreement will further enhance quality of life and the predictability of schedules

On an AAR-hosted media call earlier this week, Jefferies said that the terms of the tentative agreement represent historic wage increases, the highest in more than five decades, resulting in an average salary of around $160,000 by the end of the contract’s term.

“Most importantly, the contract will maintain first-in-class healthcare at an employee cost share that is dramatically lower than that compared to other industries,” he said. “Our employees will be compensated in the top 10% of any industry in the U.S. It is also important to note that these agreements take significant steps to address key quality of life issues, work scheduling issues…things that several of our unions who work a more unscheduled shift stated as priorities during negotiations.”

AAR had repeatedly made the case for the need for the sides to come to terms, pointing to its September report, stating that a strike could cost the U.S. economy $2 billion per day.

And as reported by LM, President Biden called on Congress to pass legislation earlier this week to “adopt the Tentative Agreement between railroad workers and operators—without any modifications or delay—to avert a potentially crippling national rail shutdown.”

The National Carriers’ Conference Committee (NCCC), an organization representing the nation’s freight railroads in national collective bargaining, said that this legislation will implement tentative agreements for the four unions that had not previously ratified their agreements, adding it is pleased that the railroads and rail employees will be able to continue providing uninterrupted service to customers, communities, and the public throughout the holiday season and beyond.

“The railroads value the vital contributions made each day by employees to keep our economy moving, and the service we provide to customers would not be possible without the dedicated efforts of the entire workforce,” said NCCC. “Many employees have already begun to receive the well-deserved compensation increases, bonus payments, and other benefits provided by these agreements, and we now will implement them across the entire workforce. We look forward to using these agreements as a springboard for further collaboration with our unions regarding opportunities to enhance rail careers, promote safety, support the environmentally friendly and efficient transport of freight, and strengthen our role as the backbone of the U.S. economy. We have heard and recognize the deeply felt concerns regarding paid leave benefits and will work with rail union leaders in future bargaining rounds to assess the structure of these provisions.”