Businesses are increasingly worried about the renewed threat of a railroad strike after two unions rejected their deals, and they want the Biden administration and Congress to be ready to intervene.
A coalition of 322 business groups from a variety of industries signed off on a letter to President Joe Biden Thursday urging him to make sure the deals he helped broker last month get approved because a railroad strike would have dire consequences for the economy. All 12 rail unions must approve their agreements to prevent a strike next month.
“It is paramount that these contracts now be ratified, as a rail shutdown would have a significant impact on the U.S. economy and lead to further inflationary pressure,” wrote the group, which includes nearly every major trade group and quite a few state business associations.
Biden has been watching the contract dispute closely and appointed a special board of arbitrators this summer to try to help resolve it, but the White House hasn’t said whether he will get personally involved again.
The railroads have offered 24% raises and $5,000 in bonuses in the five-year deal, which would be the biggest increases in more than four decades, but the negotiations hinge on quality-of-life concerns. The unions that represent the conductors and engineers who drive the trains want the railroads to ease the punishing schedules that they say keep them on call 24-7, and the other unions want the railroads to add paid sick time.
A strike isn’t imminent because the two unions that voted down their deals agreed to retry negotiations before considering a walkout, but the railroads face a Nov. 19 deadline with one of those unions. Six smaller unions have approved their deals while four others are set to vote over the next month, including the two biggest ones and the engineers and conductors in those two unions have the most quality-of-life concerns.
The head of the Brotherhood of Maintenance of Way Employes Division union that rejected its agreement earlier this month said if the railroads won’t consider adding sick time he has no choice but to prepare for a strike next month. Union President Tony Cardwell said railroad executives continue to “bow to Wall Street’s continued desire for more than its fair share” as they report billions in profits.
Union Pacific, Norfolk Southern, BNSF, Kansas City Southern, CSX and the other railroads want any deal to closely follow the compromises recommended by arbitrators Biden appointed, so they have rebuffed all pleas for paid sick time. The industry also argues that the unions opted to forego paid sick leave over the years in favor of higher wages and strong short-term disability benefits that kick in as soon as four days into an absence and can continue up to a year.
Ian Jefferies, who leads the Association of American Railroads trade group, said Thursday the “BMWED’s recent proposal was not a realistic offer” because the union “simply demanded more — and they did so with full knowledge that the railroads would not agree.”
If both sides can’t agree on a deal, Congress may step in and block a strike. The American Fuel and Petrochemical Makers, which endorsed Thursday’s letter, is already lobbying lawmakers to make sure they’re ready to act because refineries rely on railroads to deliver more than 300,000 barrels of crude oil and other chemicals every day.
“We’re heavily stressing the need to avoid a strike at all costs — not just for our industry. It’s going to affect every industry” said Rob Benedict, vice president of midstream for the AFPM.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
