Industry Groups Urge White House to Intercede on Rail Talks

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A coalition of 322 organizations that relies on the nation’s Class I freight railroads wrote a letter to President Joe Biden Oct. 27, urging the White House and administration officials to continue to seek a settlement in the increasingly bitter contract dispute that could result in a nationwide rail strike in November or December and could cause extensive damage to the U.S. economy.

“We are writing to you today urging you to continue to work with the railroad unions and railroads to ensure that the tentative agreement that you helped broker is ratified by the parties. It is paramount that these contracts now be ratified, as a rail shutdown would have a significant impact on the U.S. economy and lead to further inflationary pressure,” said the letter, which was written by a wide-ranging group of trade associations including American Trucking Associations. Other groups that signed on to the letter included the National Retail Federation, the U.S. Chamber of Commerce, the American Farm Bureau, the International Association of Movers and the International Bottled Water Association.

“Unfortunately, we have seen two unions reject the agreement and there are concerns that others may follow. If that were to be the case, we could witness a strike that would shut down the entire freight rail system. Because the White House played such a central role in the process, we believe it can be helpful in continuing to move the process forward in a positive direction,” the letter said.

Otherwise, “Congress will be called upon to act,” the letter added.

The letter was sent after a second union, the Brotherhood of Railroad Signalmen, said its members, by a more than 60% margin, rejected the tentative agreement Oct. 26 negotiated by Labor Secretary Marty Walsh and others. The agreement came after an all-night bargaining session in mid-September, just hours before a nationwide deadline.

According to the Associated Press, Union President Michael Baldwin said the “lack of good-faith bargaining” by the railroads and the recommendations of a board of arbitrators that Biden appointed this summer denied workers the “basic right of paid time off for illness.”

The unions say the railroads, including a couple that reported more than $1 billion profit in the third quarter, can easily afford to offer paid sick time. The negotiations included CSX, Union Pacific, Norfolk Southern, BNSF and Kansas City Southern railroads.

While the estimated 115,000 workers in the 12 unions are slated to receive pay increases of 24% over five years, and $5,000 bonuses, the union members say management’s position on paid time off, vacation scheduling and other contract language issues are at the heart of the dispute, and are much larger topics they’re concerned about, rather than just money.

To date, six of the 12 main rail unions, including two of the largest, have ratified the agreement, two have rejected it and four other unions are set to vote on the tentative package in the coming days.

“We applaud your administration for leading on this issue from the onset. With your help, from establishing the Presidential Emergency Board to involvement in the direct negotiations among the parties, the tentative agreement was reached on Sept. 15,” the letter acknowledged.

Freight experts say a nationwide rail strike would be devastating to the U.S. economy, especially if it were to take place in the peak retail season of November and December.

The National Retail Federation says in 2021 consumers spent a record $886.7 billion. It is estimated that freight rail carries 30% of the nation’s cargo, and White House and transportation officials say there is not enough capacity in the trucking industry to handle a strike.

“We continue to urge that the contracts be ratified to provide stability and predictability to the system. Your involvement can only help make that happen and ensure there is no interruption to rail service,” the letter said.

If there were to be a rail strike it is not clear how long it would last. Under the terms of 1926 Railway Labor Act, the Courts and Congress have the power to intercede in the dispute and lawmakers can impose a settlement. However, union leaders appear to be moving away from the idea of a labor dispute.

“I need to confront some fringe groups proposing dangerous ideas of unsanctioned work stoppages,” Brotherhood of Maintenance of Way Employes Division President Tony Cardwell wrote in a letter to union members on Oct. 26. The BMWED is the first union to have turned down the agreement. “Workers must be wary of a group throwing disruption grenades from behind a wall of secrecy. BMWED will not support or condone an illegal work stoppage and our bylaws prohibit strike wages or other benefits for an illegal strike.”

Cardwell said he believes the collective bargaining process will eventually produce an agreement.

The railroads have estimated that a rail strike could cost the economy $2 billion per day.