Acting quickly to head off a threatened rail strike, both houses of Congress sent a bill to President Joe Biden that will impose a settlement on rail unions. The House version of the bill would have added a provision requiring the railroads to provide seven more paid sick days off, but that provision failed to garner the 60 votes necessary in the Senate’s version, with only 52 votes in favor. Biden signed the bill Dec. 2.
Railroads and rail unions had until Dec. 9 to reach agreement ahead of a threatened strike, but members of four of the 12 railroad unions have rejected terms of a settlement proposed in September by a Presidential Emergency Board convened by Biden. The deal proposed by the PEB included a 24% raise over five years (starting retroactively at 2020), and one extra paid sick day off, but did not include more paid sick days off, the issue that has been at the heart of the unhappiness of some union members with the deal.
Biden called on Congress to impose the September deal nevertheless “without any modifications or delay,” disappointing union leaders. Biden said federal officials “believe that there is no path to resolve the dispute at the bargaining table and have recommended that we seek Congressional action.”
Railroads have reduced headcount by attrition by about 40,000 workers since 2018. They are relying on algorithms and AI to schedule trains. Workers say they are overstressed and constantly on call. Rail performance has suffered; since the spring, railroads have had to submit weekly reports to the National Transportation Safety Board documenting performance.
Farm and business leaders had urged a quick resolution to the conflict, warning that any rail strike could cost the economy up to $2 billion a day. In a letter to leaders of Congress, the U.S. Chamber of Commerce reminded them that the threatened strike was already disrupting shipments, since shippers have to make plans days or weeks ahead.
It was those arguments that appeared to persuade Biden. He wrote, “Let me be clear: a rail shutdown would devastate our economy. Without freight rail, many U.S. industries would shut down. My economic advisors report that as many as 765,000 Americans—many union workers themselves—could be put out of work in the first two weeks alone. Communities could lose access to chemicals necessary to ensure clean drinking water. Farms and ranches across the country could be unable to feed their livestock.”
The Railroad Labor Act of 1926 gives Congress the authority to impose solutions to rail disputes on both labor and management, as part of its Constitutional authority to regulate commerce. Since its passage, Congress has intervened 18 times in railway negotiations, each time to prevent a strike. Intervention usually occurs only after the Presidential Emergency Board process is complete. The last intervention by Congress was in 1992; on that occasion Congress forced the parties into arbitration.
Mike Steenhoek, executive director of the Soy Transportation Coalition, wrote, “We are very pleased [that] both the House and the Senate responded quickly to President Biden’s call for Congress to act to prevent a potential railroad strike. Throughout the negotiation process, we did not take a side between railroads and railroad workers. However, we clearly are on the side of the American farmer, who would have been harmed if a shutdown would have been allowed to occur. Our preference was for the contract negotiations to be conducted and concluded by the two parties alone, but when those negotiations had reached an impasse and a shutdown was increasingly becoming a possibility, many agricultural and other organizations urged the President and Congress to intervene.”
Secretary of Agriculture Tom Vilsack said, “I thank Congress for taking swift action to prevent a potentially crippling rail shutdown by sending to the president’s desk legislation that adopts the Tentative Agreement between railroad workers and operators. A rail shutdown would have had significant and long-lasting effects on American food and agriculture and would have been devastating to the nation’s economy. Under President Biden’s leadership, U.S. farmers and ranchers, as well as American consumers, can breathe a sigh of relief that the trains will stay on track to deliver food, inputs, raw materials, and other essential items across the nation.”
David Murray can be reached at [email protected].
