House approves bill focused on reaching a deal between railroad carriers and labor unions

The uncertainty regarding the impasse between freight rail carriers and rail labor unions received some potential clarity earlier today, when the United States House of Representatives 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.

As the House took up this legislation focused on adopting the terms of the tentative agreement drafted by the Presidential Emergency Board (PEB) established by the White House in September, in an effort to prevent a national railroad strike, with a December 9 deadline, eight of the 12 railroad labor groups have fully ratified terms of the tentative agreement and nine of 13 contracts are ratified (as SMART-TD has two separate contracts). The holdovers include: 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).

As previously reported, these agreements are 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 focuses on sick leave and shift scheduling, as well as staffing shortages and related issues.

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.

These bills are now headed to the Senate, whom will vote 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.”

And it added that after 30 days from today, November 30, if the carriers and unions are not able to reach an agreement on the implementation of seven days of paid sick leave, the parties will enter into binding arbitration to reach a final resolution.

Association of American Railroads President and CEO Ian Jefferies did not pull any punches in assessing the House’s actions today.

“Today’s strong House vote to follow the clear majority pattern and implement remaining tentative agreements clearly underscores the overwhelming bipartisan support for Congress to heed President Biden’s call and quickly avert an economically destructive national rail shutdown without modification or delay,” said Jefferies in a statement. “The Senate must now act quickly to implement the historic deals reached at the bargaining table and already ratified by eight of twelve unions. Unless Congress wants to become the de facto endgame for future negotiations, any effort to put its thumb on the bargaining scale to artificially advantage either party, or otherwise obstruct a swift resolution, would be wholly irresponsible, and risk a timely outcome to avoid significant economic harm.”

Addressing H. Con. Res. 119, AAR officials said that this partisan resolution inserts itself between the parties undermining longstanding bargaining principles, as well as compromising future negotiations, not only for the rail industry but also for Amrtrak and the airlines. It added that railroads are calling on the Senate to implement

On an AAR-hosted media call yesterday, 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.”

Jefferies added that the unions that don’t have ratified contracts have continued conversations with the carriers, but with the December 9 deadline coming, it is important to recognize that things are on a finite timetable, with an increasingly shorter timeline.

The House’s approval of H.J. Res. 100 was welcomed by the National Retail Federation (NRF).

“America’s railroads serve nearly every sector of our economy and provide access to global markets,” said NRF President and CEO Matthew Shay in a statement. “The freight rail system is a lifeline for many industries, ensuring the transport of not only retail goods, but also essential food and energy supplies. We commend the swift action of the House to approve this critical piece of legislation and prevent a potential catastrophic freight rail shutdown that could cost the economy $2 billion a day. It is imperative that the Senate now acts immediately to approve the measure and send it to President Biden’s desk. Until the Tentative Agreement is in place, U.S. economic security remains in jeopardy.” 

Tony Hatch, president of New York-based ABH Consulting, recently told LM that railroad labor union leadership strongly want these agreements approved.

What’s more, Hatch said that if a strike were to occur, there would likely be a subsequent impact on many other industries that run on a just-in-time basis, like automotive and steel, with workers in those sectors being laid off, albeit not likely for a long time. And he added that when a deal is ultimately reached, it is likely to be very close to the PEB’s recommendations.

“There will be some people like Bernie Sanders, who want to interfere,” he said. “But will Congress, really, in an election year, want to interfere on behalf of rail workers in a way that's more complicated? They don't really understand all the rules, in a way that could potentially be hurting other workers and hurting the economy. Do they want to be viewed as hurting the economy. Behold the unions when they go back to the votes. A strike like this could very well last only one day or even less. All the things labor is saying and the AAR’s report saying that a strike could cost the economy $2 billion a day is to make sure Congress does its job, which is to basically do nothing and rubber stamp the PEB’s recommendations.”