The Circuitous Path Of The Railroad Unions’ Negotiations

Earlier this summer the U.S. economy narrowly averted a strike in the freight railroad industry. However, despite reaching a contract settlement with the assistance of the White House, it appears that these contracts could unravel, and primarily due to the unwillingness of some labor leaders to accept the terms of contracts they negotiated.

The mechanics of the negotiations with the unions and railroads are somewhat complicated: There are a dozen different unions representing the 120,000 or so men and women who do the heavy lifting of keeping the railroads moving, and each union has been renegotiating contracts in earnest since 2021. Technically, rail contracts never expire under the Railway Labor Act—they are simply amended.

Besides desiring higher wages, the workers were desirous of more flexibility in their work hours, especially with regard to obtaining time off for doctors’ appointments or other health care issues. Because of the fact that it is difficult for railroads to hew to a predictable schedule (although it’s an issue that railroads have invested heavily to address), certain occupations like conductors and engineers can have a somewhat unpredictable work schedule, which can make scheduling such quotidian but necessary tasks as a doctor’s appointment complicated.

By last summer nine of the twelve unions had reached an agreement, but negotiations between the railroads and the last three unions stalled and appeared to be heading towards a strike.

Since each of the 12 rail unions refuse to cross the picket lines of another union, a strike by any one union would have resulted in a widespread shutdown of the country’s freight rail network. Given that a half million carloads of goods travel by rail each week, this potential shutdown constituted a major threat to the health of the nation’s economy.

Shortly before the contractual deadline passed, the White House—led by Secretary of Labor Marty Walsh—entered the negotiations and helped broker a last minute agreement that averted a strike.

However, the unions still had to ratify the agreement, and that may be more difficult than the White House anticipated. While six of the twelve unions quickly ratified their contracts—which provided for a 24 percent wage increase, a $5,000 signing bonus, more flexibility in work schedules, paid days off, and other expanded benefits—a track workers’ maintenance union rejected their contract.

They did so despite the fact that the raises specified in the contracts would put railroad workers amongst the highest paid blue collar workers in the world, with average union wages topping $110,000 before overtime and reaching $160,000 total with benefits. That union also secured what it long stated was its top priority – increased travel reimbursement.

One contributing factor for these rejections is that the leadership in some larger unions, after negotiating an agreement, refused to recommend that its members ratify the contract. Many members may interpret this as a nudge to vote against the contract. Puzzlingly, the leader of the union that rejected their deal was positive about it when sent out for vote, but is now singing a different tune.

While the recent rejection does not necessarily portend a strike—the unions agreed to wait until after Congress is back in session before voting on a strike, and negotiations continue— leadership’s abdication on a vote recommendation suggests that the White House negotiations may not have been done in good faith.

Union leadership that negotiates an agreement has an obligation to recommend to its rank and file members that they vote for it: Merely instructing them to “vote their conscience” is an implicit but clear message to vote against it.

The blatant undermining of an agreement they reached on their terms begs an obvious question: Why, precisely, did they agree to a contract in the first place for which they did not intend to pursue ratification, and in whose interest was that done for?

Given that the current administration has pursued numerous policies that would slow or reverse the railroads’ attempts to boost productivity and reduce employment—such as stopping a merger, mandating reciprocal switching, or forcing railroads to reverse their efforts to implement precision scheduled railroads—punting any strike beyond the mid-term election while also allowing the administration to trumpet its success at avoiding one before it could be construed as a quid pro quo for a government that’s done more to try to boost rail employment than any other.

While contract negotiations occurred at a propitious time for the unions—the supply-chain bottlenecks were still throttling the economy over the summer—extricating themselves from the agreed-upon contract threatens to cost them both public goodwill as well as the political capital of the Democratic party, which would appear as either impotent or deceitful should one occur. Congress or the Administration would almost assuredly take steps to ensure that one did not occur after the election as well, and if that settlement were to significantly improve the unions’ side it would make the pre-election negotiations look less than above-the-board.

An expedient ratification of the remaining contracts is in everyone’s best interests.