Rail Unions Reject Tentative Deal, Reinstating Strike Risk

Background

On July 15, President Joe Biden blocked a freight railroad strike in Omaha, Nebraska. This strike would disrupt the fragile supply chain by delaying the shipment of goods for at least 60 days.

To combat this, President Biden appointed a board of arbitrators, the Presidential Emergency Board, to help the dispute with contract building and negotiation mediation.

The appointed Presidential Emergency Board gave the 12 unions involved a 124-page report outlining their suggested terms.

Early on Sept. 15, it was announced that the six Class I railroads and union workers reached a tentative deal with the management council for the rail carriers.

The tentative deal prevented about 115,000 conductors, engineers, and other employees from staging a walkout.

What’s New?

Just when we thought the rail unions and railroads reached a deal that pleased both parties, on October 10, approximately 12,000 union workers voted against the tentative labor agreement.

Union workers are still not satisfied with the terms of the sick-leave policy, compensation, and working conditions. 

Brotherhood of Maintenence of Way Employes took a vote, 6,600 voted against the terms of the tentative deal, and a mere 5,100 voted in favor of it.

What’s going to happen?

This majority ruling results in a “status quo” period, which is a period of time where no strike can take place. When contract negotiations are taking place, all parties must still abide by the terms of the last agreed-upon contract terms. This means the union rail workers cannot go on strike until after Nov. 19.

What could happen?

All it takes is for one union to go on strike for a supply chain disruption to occur. In the event of a strike, workers not part of the strike could refuse to cross the picket line, resulting in a possible nationwide lockout.

A lockout is when management or a company stops or denies employment to their employees during a labor dispute. A lock-out is something the employer provokes and is done to force unions and/or employees to accept the terms set forth by the employer.

The only precedent we have for this is back in 1992 when the International Association of Machinists went on strike against CSX.

Within an hour, other freight rails “locked out” their workers.

The National Carriers Conference Committee, the organization that represents the freight railroads said they are disappointed with the outcome of the vote from the unions.

Conclusion

When 12,000 union workers voted against the tentative labor agreement, they opened the floodgates to what could be one of the biggest disruptions to the modern-day supply chain that we have seen since the damages caused by the COVID-19 pandemic. Subscribe to our newsletter for more updates like this.

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