Unions and the National Railroad Labor Conference, which represents management at the bargaining table, met with federal mediators and U.S. Labor Secretary Martin Walsh on Wednesday to see if they could reach an agreement. Unions said there had been no progress. Freight railroads have generally thrived during the pandemic, so a key dispute is not pay but the rules that control worker scheduling. Many of the engineers and conductors who make up the two-man crews on each train must be “on call” to report to work seven days a week, preventing them from making their own plans, depriving them of time with their families and creating a high turnover rate.

Time is up

Since railroad workers are subject to different labor laws than those that govern labor relations at most businesses, it is possible that Congress could act to prevent or quickly stop a strike. But that would require a level of bipartisanship that is rare in Washington just weeks before midterm elections. President Joe Biden averted a strike two months ago by imposing a cooling-off period during which a committee he appointed, known as the President’s Emergency Board (PEB), reviewed contentious issues in the negotiations and issued a proposed settlement. This 60-day grace period is set to expire at 12:01 AM. ET. September 16 and Biden has no power to prevent a strike at that time. Only Congress can act to prevent a work stoppage, either by forcing a deal on the two sides or by extending the current grace period. The PEB recommended multiple annual increases until July 2020, when the previous contract was set to expire. They would give workers an immediate 14 percent raise, as well as additional back pay for hours worked starting in 2020. There will be more raises in the future, resulting in a 24 percent pay increase over the five-year contract that will run from 2020 to in 2024, plus an annual cash bonus of $1,000. The PEB’s wage recommendations are somewhat less than what unions have been asking for and somewhat more than management has previously proposed. But it was lucrative enough that five of the smaller unions representing more than 21,000 railroad workers agreed to a tentative labor agreement based on the committee’s recommendations, though they still need to be ratified by their members to take effect. And the PEB’s wage recommendations would probably be enough to win the approval of the other unions, even though they were asking for more. “We’re not going to sit here and argue [wages] or health care. We’re beyond that,” said Jeremy Ferguson, president of the union representing conductors, one of two freight train workers along with engineers.

Anger about work rules

The conductors union and six other unions preparing to strike, including the one representing engineers, are unhappy with the work rule recommendations and how the “on-call” requirement will affect the quality of life of their members, depriving them of any free time with their families even when they are away from work. Unions are urging allies in Congress not to act, arguing that a strike is the only way to reach a deal that can improve what they say are intolerable work rules that are driving employees out of business, causing staff shortages and well-documented service problems in freight rail service. “The fact is that they [the railroads] they are relying on Congress to act,” said Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainers. “We left them [the union’s allies in Congress] we know we need them to stay away from it.” “This is an opportunity for Democrats to stand up for something they say they stand for, the working class and working people,” Ferguson said.

Will Congress act?

If Congress does, it would present a difficult political choice for the Biden administration. Biden is as pro-union as any president in history, but he doesn’t want to see problems with supply chains, prices and the economy ahead of crucial midterm elections. Asked about the risk of a strike, a White House official stopped short of the possibility of congressional action, instead stressing the need for a negotiated settlement to avoid the shutdown he hopes to avoid. “After the pandemic and supply chain disruptions of the past two years, now is not the time for more uncertainty and disruption,” the official told CNN’s Betsy Klein. The official said the White House “stands ready to support the parties as they work toward an agreement or a voluntary extension of the withdrawal period.” “We are not taking a position on what the elements of a deal should be,” the official added. “We are confident that the parties will make every effort to negotiate in good faith toward a mutually acceptable solution, and we urge both sides to do so promptly.”
Democrats in Congress could impose a contract more in line with union preferences than the one recommended by the presidential panel. But that may struggle to get the necessary Republican support to pass. Republicans could potentially benefit if there was a protracted railroad strike causing problems for the economy right before the election, especially if it could be blamed on Democrats. Even some businesses that would like to see the dispute settled without a strike are nervous about turning to Congress. “Frankly, it’s not a good sign if it ends up going to Congress,” said one businessman closely following the strike, who spoke on condition that his name not be used.
“You don’t know what you’re going to get. You could have members who could push legislation to require one thing or another. . . . Once Congress gets involved, it’s chaos.” This executive believes Congress will throw off the rails, extending the cooling-off period, perhaps to the day before the election, rather than forcing a deal. But this is still not a solution. “Here’s the rub, it’s been 30 days since then [presidential panel’s] recommendations. Only five of the 12 railway unions have signed the recommendations,” he said. At this point, the railroads are still urging unions to agree to the terms proposed by the president’s panel, rather than calling on Congress to act. “It is in the best interest of all stakeholders and the public that the railroads and railroad labor organizations immediately reach agreements that will provide increases in workers’ wages and prevent disruptions to rail service,” the National Railroad Labor Conference said. Now is the time to use the PEB’s recommendation as the basis for an immediate and voluntary agreement.” The railroad trade group issued an estimate Thursday that disrupting freight rail service would cost the U.S. economy $2 billion a day. He did not specifically call for congressional action, encouraging the parties to resolve the dispute through negotiations, though in his statement he said, “ultimately, Congress has the power to mediate and prevent a shutdown.”

Record profits for railroads

The strike threat comes as several railroads, including Union Pacific ( UNP ), Norfolk Southern ( NSC ) and Berkshire Hathaway’s ( BRKA ) Burlington Northern Santa Fe, have reported record profits.
Unions argue that companies are making profits on the backs of their workers, creating conditions that lead workers to quit. Employment at the nation’s major railroads has been cut by more than 30,000, or about 20 percent of the workforce, since the last contract struck in 2017. Union leaders say their members are now at a tipping point and are willing to strike to win change. “This is not a personal choice of the union presidents,” said engineer union president Pierce. “Membership has made it loud and clear to us that this is not an agreement that membership would ratify.” — CNN’s Betsy Klein contributed to this report