Rail strike threat recedes as Congress prepares to impose unpopular contract on unions

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CNN business

The threat of a railcar strike that had been building over the past few weeks quickly subsided after President Joe Biden and Democratic leaders in Congress agreed late Monday to back legislation that would allow a strike by more than 100,000 union members later next year would block week.

The move relieved business groups, which were increasingly concerned about the threat posed by 30% of the nation’s freight movements grounding. More than 400 business groups came together Monday to urge convention leaders to act quickly.

A strike scheduled for December 9 would have disrupted still-struggling supply chains, causing shortages and raising the price of gasoline, food, cars and other commodities, dealing a severe blow to the economy which many fear is already threatening to tip over into a recession. According to an estimate by the Anderson Economic Group, a week-long strike could cost the economy $1 billion. The White House estimated that as many as 765,000 workers could be temporarily out of work within two weeks if railroad workers went on strike.

Biden and the Democrats had been unwilling to block a strike in September as negotiations for an earlier strike deadline approached. As another strike deadline approaches, they felt they had no choice but to act.

The move is sure to anger the union’s grassroots, which rejected labor deals reached by their leaders earlier this fall. Despite his support for workers, Biden has failed unions and their members with his actions, said Michael Baldwin, president of the Brotherhood of Railroad Signalmen, one of the four unions whose members voted against the deal that could now be imposed.

“We are trying to address the issue of sick leave here. It’s very important,” Baldwin told CNN on Tuesday. “This action prevents us from reaching the end of our process, robs us of the power and ability to force negotiations or force the railroads to … do the right thing.”

Baldwin said this is an issue rail unions have tried to address for decades, but it has received more attention from members recently.

“This became a glaring problem during the pandemic when we had members being forced by their employers, the railroads, to stay at home and quarantine without pay,” he said. “But it really comes down to simple things like the flu for a day or two, or a sick kid and being able to take a day or two paid.”

The unions had argued that they needed the threat of a strike to push through changes to the tentative agreements members had rejected, including provisions on paid sick leave missing from the current contracts. They argued that the railroads, many of which reported record profits last year and are on track to set new profit records this year, could afford to meet the unions’ demands. They argued the railroads were refusing to negotiate in good faith, hoping Congress would step in and give them what they wanted.

Biden’s statement Monday night suggested the railroad strategy had worked.

“During the ratification votes, the labour, agriculture and transport ministers have been in regular contact with union leaders and management. They believe there is no way to resolve the dispute at the negotiating table and have recommended that we ask Congress for action,” he said. “As a proud pro-union President, I am reluctant to disregard the ratification procedures and the views of those who voted against the deal. But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I think Congress needs to use its powers to adopt this deal.”

Biden and House Speaker Nancy Pelosi both said Congress should enforce the terms of the interim deal, which was rejected by four of the 12 railroad unions. While the other eight unions had ratified the agreements, sometimes by a narrow margin, they had been prepared to respect the picket lines of any striking union, meaning that even if one union had walked out, the railroads would have ground to a halt.

The fact that Congress will push through the rejected interim agreements could be viewed as a limited union victory: Congress could instead have voted to push through agreements that are worse for workers than those their members rejected.

Congressional Republicans, who passed legislation to keep workers on the job before the September strike deadline, wanted to push through a contract that would have been worse for union members, a contract based on recommendations from a panel that was appointed this summer to try to reach him, a deal acceptable to both sides. Unions were able to negotiate improvements to this proposal at the September negotiating table.

But at least one of the unions that turned down the deal, the Brotherhood of Maintenance of Way Employes Division [BMWED] which represents more than 20,000 track maintenance workers, previously said that if Congress were to impose a contract, it should include union demands for paid sick leave.

“BMWED’s proposal would cost literally a penny for every dollar of the railroad’s record profits, assuming full utilization by each individual member. It’s less than 2% of the $11.5 billion that CSX, Norfolk Southern and Union Pacific spent through the third quarter of 2022 on share buybacks alone,” the union said earlier this month.

While Biden said he sympathized with the unions’ demand for sick leave, he said Congress should stick to the tentative agreements negotiated in September.

“Some in Congress want to change the deal to make it better either for workers or for management,” Biden said in his statement. “However well intentioned, any change would risk delays and a crippling closure. The agreement was made in good faith by both parties.”