NCCC says ‘cooling off’ period for BMWED rail labor union is extended

With the current state of negotiations based between the 12 United States railroad labor unions and the nation’s four Class I railroad carriers still playing out, the “cooling off period” for one of the unions— the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED)—was extended this week from November 19 to December 4, the National Carriers’ Conference Committee (NCCC), an organization representing the nation’s freight railroads in national collective bargaining, said this week.

NCCC said that this update is subject to further extension to maintain alignment, if necessary, with other labor organizations, adding that this extension eliminates the threat of a near-term freight rail service disruption.

“The railroads will remain engaged with BMWED throughout the extended cooling off period and will continue to seek an agreement based on the framework recommended by Presidential Emergency Board 250,” NCCC said in a statemen. “Agreements based on the PEB’s recommendations were endorsed by President Biden as a ‘win for tens of thousands of rail workers’ and have been ratified by the members of seven other unions. Three unions have open ratification votes, and the cooling off period extension…will allow the members of these unions to complete their voting without disruption from the threat of a strike.”

At the moment, seven of the 12 U.S. railroad labor unions inked tentative agreements, following the announcement of the recent appointment of the Presidential Emergency Board (PEB) by President Biden, which is focused on resolving this ongoing labor dispute. The August 16 release of the PEB’s recommendations, which 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 a portion of the lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership, according to the National Carriers Conference Committee (NCCC), an organization representing the nation’s freight railroads in national collective bargaining.

The Wall Street Journal reported that the wages and other contract terms largely followed PEB's recommendations, adding that unions had sought raises of 31% over the five-year term of the contract, while railroads offered 17%, with wage increases amounting to around 13% in the previous five-year contract and annual wage increases in the new contract coming in between 3%-to-7%.

In October, BMWED membership voted against ratification of the tentative national agreement.

Looking at the BMWED voting results, the union said that the American Arbitration Association counted and verified the election results, with a total of 11,845 BMWED members submitted ballots, with 6,646 against ratification and 5,100 approving the tentative agreement. It added that 99 remaining ballots were submitted blank or voided for some other user error.

“The majority of the BMWED membership rejected the tentative national agreement and we recognize and understand that result,” BMWED President Tony D. Cardwell said in a statement issued on October 10. “I trust that railroad management understands that sentiment as well. Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard. Railroaders do not feel valued. They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness. The result of this vote indicates that there is a lot of work to do to establish goodwill and improve the morale that has been broken by the railroads’ executives and Wall Street hedge fund managers.”

Cardwell added that BMWED members are “concerned with the direction of their employers and the mismanagement and greed in which they have consistently implemented,” with BMWED members sharply focused in improving working conditions across the entire Class I network.

In September, the Association of American Railroads (AAR) issued a report, which issued a firm onus on the need for all 12 rail labor unions to reach deals, explaining that a nationwide rail service interruption “would dramatically impact economic output and could cost more than $2 billion per day of a shutdown.”

What’s more, it added that should deals not be reached by the deadline, Congress will need to step in and act to prevent a service interruption that will harm and impact every rail-served economic sector. Examples of this highlighted in the report include: idling more than 7,000 trains per day; triggering retail product shortages and widespread manufacturing shutdowns; job losses; and disruptions to hundreds of thousands of passenger rail customers.

“As the freight sector heads into peak shipping season, a nationwide rail work stoppage would result in an unnecessary $2 billion daily economic hit,” said AAR President and CEO Ian Jefferies in a statement. “President Biden’s PEB recommended terms that would maintain the highest quality health care coverage and result in compounded wage increases of 24%, bonuses totaling $5,000 — the highest pay increases in nearly 50 years. Like those unions that have already tentatively agreed to the PEB deal, each of the remaining unions can still enter into agreements based on these recommendations. However, should negotiations fail and result in a work stoppage, Congress must act to implement the PEB recommendations—rewarding employees and stopping unnecessary economic harm and uncertainty for rail customers.”

For historical context, the AAR report cited a 1992 econometric model used by the Federal Railroad Administration, in order to estimate the impact of a national rail shutdown on both employment and economic output. The model found that a two-week shutdown would result in 570,000 rail-served industry layoffs and $14 billion in lost output—or $1 billion per day.

And it added that daily tally would be much higher now, due to inflation, the constant-dollar GDP chain-weighted deflator, which measures economy-wide price changes; and how much supply chains have been streamlined since 1992, with limited excess capacity to move goods and freight.