A Primmer on What Lies Ahead in the Coming Weeks in the Rail Labor Contract Dispute

Writing on the website of Railway Age, Frank Wilner said predicting what will happen in the next phase of the contract talks between railroad labor unions and management is akin to trying to find a black cat in a dark room.

It’s an apt description because neither side is going to reveal what it is willing to give up and what it absolutely must have in the negotiations to amend the contract that governs wages, benefits and work rules at most Class 1 railroads and many smaller ones. Tipping your hand is not a good negotiating strategy even if bluffing and posturing might be.

The major talking point of most stories to date is that a national railroad work stoppage looms as early as Dec. 4, the date one of the unions rejecting the contract has said is the earliest it might strike. Other stories have given Dec. 9 as the most likely date a work stoppage could begin.

At this point the railroad contract negotiations have become a contest of wills with each side seeking to assess the strengths and weaknesses of their adversary and how best to exploit those.

Under the federal Railway Labor Act contracts in the railroad industry never expire but can be amended, which is what is going on now.

Talks to amend the contract began in early 2020. It is typical for contract talks to drag out for years before reaching an agreement.

What we know at this point is that members of four of the 12 railroad labor unions involved in the negotiations have rejected the proposed amended contract.

Those unions and the percentage they represent of the approximately 115,000 railroad workers they represent include the Brotherhood of Maintenance of Way Employees (19 percent), Brotherhood of Railroad Signalmen (6 percent), International Association of Boilermakers and Blacksmiths (1 percent) and SMART-TD, excluding yardmasters (30 percent).

The eight unions that have ratified the tentative agreement and the percentage of the total their members represent are the American Train Dispatchers Association (1 percent), Brotherhood of Locomotive Engineers and Trainmen (20 percent), Brotherhood of Railway Carmen (7 percent), International Association of Machinists and Aerospace Workers (5 percent), International Brotherhood of Electrical Workers (5 percent), Mechanical Division of SMART (1 percent), National Conference of Firemen and Oilers (2 percent), and the Transportation Communications Union (3 percent). 

Although it remains to be seen how the contract dispute will eventually be resolved, there are a number of directions it could go.

The four unions that rejected the contract could reach a different – and presumably from their standpoint better – agreement than the one they turned down. If so, those provisions would be applied to the contracts already ratified.

There is widespread agreement on both sides that this is the best option. But is it the most realistic one?

The carriers have issued public statements saying they will not offer any more concessions and that any changes in the proposed contract amendments must be in alignment with the recommendations of a presidential emergency board tissues its findings for a new contract back in August.

That statement was posturing even if it probably reflects generally how the carriers view the negotiations.

That is bad news for the unions who through their own public statements have said the sticking point is not how much money their members will make in wages – the two sides have agreed on that – but a demand for paid sick time off from work.

Another avenue is the leaders of the unions rejecting the contract could override the will of their members and agree to submit the contract dispute to binding arbitration.

This doesn’t happen often, but it has occurred, most recently in 1996 when officers of the United Transportation Union overrode member rejection of a tentative agreement in favor of binding arbitration.

If negotiations fail, there are several ways the dispute can go but all of them lead back to Congress imposing a settlement.

It would be a matter of how lawmakers choose to do that. Congress has stepped in before, most recently 1992, the last time a national railroad work stoppage occurred.

Congress could impose terms of a settlement, it could order the appointment of a new presidential emergency board or it could direct the parties to submit to binding arbitration.

Lawmakers could also order workers to go back to work and the two sides to return to the bargaining table. In such an event there will be a long “cooling off” period imposed in which a strike or lockout would be prohibited.

All of those courses of action carry risks which is why both sides would prefer to reach a negotiated settlement.

The risk is getting stuck with an “settlement” that contains one or more provisions you consider unpalatable.

For unions that could mean having imposed on them a contract that is less generous than the one some of them voted to reject.

As for what happens in early December if no negotiated agreement has been reached and Congress has not acted, that remains to be seen.

That deadline only means that by law union members are legally able to strike and railroads are legally able to lock out their employees.

It doesn’t necessarily mean there will be a work stoppage on that day even if that seems likely given the heated rhetoric being tossed about. The timing of when to strike or when to lock out your workers is critical and involves a calculation of when is the most advantageous time to actually go to war.

That might be sooner, it might be later. What might you be better positioned to gain now that you might be less likely to gain later and vice versa?

The unions and carriers have signaled that no work stoppage will occur if Congress is not in session. That suggests no one wants a work stoppage to last any longer than “necessary,” whatever that might ,mean.

In the past unions have sought to conduct limited strikes by targeting one carrier while still working at others.

The carriers have foiled this strategy by locking out workers in the belief that a strike again one railroad is strike against all of them. Likewise, if one union strikes, the remaining unions will honor picket lines.

In the past, railroad strikes and lockouts have been of short duration, usually a few days with the longest since World War having been four days.

The conventional wisdom is that the adverse effect of a railroad work stoppage is something the nation’s economy can’t tolerate.

That is still true and is, in fact, something the unions are counting on to force the carriers to give in on the sick days issue.

But there are other considerations that come into play, including political calculus.

The most recent mid-term elections have preserved the Democrats paper-thin margin of control of the Senate. The House will be in control of Republicans starting in January.

No one may want an economy-disrupting railroad work stoppage, but there are still gains to be had if one were to occur.

Republicans in Congress will see a work stoppage as an opportunity to inflict political damage on President Joseph Biden – at least for a time.

Democrats will see an opportunity to burnish their reputations or perceived reputations of being pro-labor — at least for a time.

It would take at least 60 votes in the Senate to overcome a potential filibuster of any proposed contract settlement. That could get dicey because it will put members of Congress into a position to have to vote on something they would rather avoid.

But at some point Congress faces the prospect of having to act lest the economy continue to suffer intolerable damage.

Another reality is that a strike would affect millions of Americans and they are not going to remain passive as they suffer economic harm and inconvenience.

The involvement of other audiences in the dispute is going to play a major role in dictating how the fight will be resolved.

Each side will be taking its best shot at influencing how those audiences view the dispute. In fact that process has been going on for several months now.

If a work stoppage occurs and if Congress does not immediately act to end it, the calculations change yet again.

Striking railroad workers will immediately see their health care insurance benefits cut off and although they will receive strike pay and, eventually, unemployment benefits, those would be just a portion of what they normally earn in wages. That will plunge some railroad workers into an economic purgatory and bring financial hardships to all of them.

Railroads will lose revenue and that will hurt them financially. Yet today’s Class 1 railroads are well positioned to weather a long work stoppage. They are not Penn Central, Erie Lackawanna, the Rock Island or the Milwaukee Road, all of which in the 1970s were strapped for cash and ended up in bankruptcy court.

Class 1 railroads today may be having customer service issues, experiencing work shortages, and losing market share to trucks, but they are not losing money. Today’s Class 1 railroads have never been financially stronger.

It is noteworthy that the margin of SMART-TD members rejecting the contract was barely over 50 percent. The percentage of BLET members voting in favor of the contract was just over 53 percent.

This is significant because it shows a split in thinking among unionized railroaders that could potentially come into play in the current dispute.

The unions are not as united as the front they are seeking to put up. Internal strife could become a factor in the dispute as those missed paychecks begin to take their toll on the household budgets of railroaders.

It also could hold longer-term implications. The railroads have not sought to hide their desire to reduce the number of conductors assigned to trains. The unions have managed to thwart those efforts for now, but the conductor issue is not going to go away.

Fissures within unions that break open during a strike and/or work stoppage could weaken unions longer term and that is something railroad management will look to exploit and union leadership fears.

For that matter the continuous relationship between railroad labor and management will continue to linger beyond whatever “settlement” is reached in the current round of contract talks because the working conditions issue that railroadrts talk a lot about these days isn’t going away either. But that is a discussion for another day.

In the meantime, railroads are likely to begin curtailing as soon as Nov. 28 shipments of certain commodities as the early December work stoppage date approaches if no new settlement is reached.

Trains magazine reported that a work stoppage would complicate the shipping of agricultural commodities due to record low water levels that have halted Mississippi River barge traffic.

There is only only so much that trucking companies can do to pick up the slack due to a shortage of trucks.

Still, shippers are likely to divert freight to highways in advance of the strike deadline. They took similar action in September when another strike/ockout deadline loomed.

However this current dispute is “resolved,” a lot of folks are going to come away displeased if not angry. Some of them are going to get a harsh lesson in the realities of labor-management relations. It will be but one chapter in an ongoing novel and a nice, tidy ending.

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One Response to “A Primmer on What Lies Ahead in the Coming Weeks in the Rail Labor Contract Dispute”

  1. pwwoodring Says:

    I think there is a consensus among railroaders/former railroaders that if the working conditions part of the dissatisfaction among operating crews does not get any relief in the final settlement, a significant percentage of employees will stick around long enough to collect the back-pay/signing bonus money and then leave en mass, further exacerbating the crew shortage problem. What percentage of employees that is, who knows, but perhaps around 5-10% of T&E employees on some railroads, the ones with the most draconian attendance policies.

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