One of the nation’s largest railroad unions has rejected a contract brokered by President Biden, raising the prospect of a freight-rail strike that could cripple the U.S. economy just before the holiday season.
The Brotherhood of Maintenance of Way Employes Division of the Teamsters, the third-largest freight rail union, rejected the proposed five-year contract by a margin of 56% to 43%.
The track maintenance union and carriers agreed to keep negotiating until Nov. 19, five days after Congress returns to Washington from the midterm elections but on the cusp of the year-end holidays.
“Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard,” BMWED President Tony Cardwell said in a statement announcing the rejected vote Monday.
“Railroaders do not feel valued. They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness,” he said,
The proposed deal includes pay raises of 24%, at least $5,000 in bonuses, and assurances that health care co-payments would not increase. But it also reportedly includes just one paid sick day, far short of what the unions sought.
The tentative agreement was hammered out just before a potential deadline for a walkout on Sept. 15, after repeated pressure on negotiators by Mr. Biden and his top advisers. At the time, the president hailed the tentative deal as “a win for America.”
“This agreement is validation of what I’ve always believed: Unions and management can work together for the benefit of everyone,” Mr. Biden said at the time.
Administration officials and business leaders had warned last month that a freight rail strike would further disrupt a deficient supply chain and bring chaos to an already reeling economy.
Passenger rail service also would be curtailed by a freight rail strike.
With inflation running at a four-decade high, shortages brought on by a freight rail strike would put more strain on consumers and businesses at the start of the holiday season. The large railroads carry about one-third of the nation’s freight, and a strike would likely result in higher prices for food and other essentials, possibly leading to empty store shelves.
The National Federation of Independent Business reported Tuesday that 32% of small business owners reported that supply chain disruptions have had a significant impact on their business, 34% of small businesses reported a moderate impact and 22% reported a mild impact.
The two largest of the 12 unions involved in the tentative rail agreement, BLET and SMART-TD, will vote soon by mail on the contract. Results of those votes won’t be known until mid-November.
“This was so predictable, and avoidable, yet here we are four weeks before the mid-term election with the prospect of another rail strike looming,” tweeted Eric Byer, president and CEO of the National Association of Chemical Distributors.
Four other unions have voted to ratify the agreement, but a strike by one union would prompt all 125,000 unionized freight-rail workers to honor a work stoppage.
The International Association of Machinists and Aerospace Workers initially rejected the deal but renegotiated a new contract. Voting by that union will be completed in mid-November.
The group representing the railroads in negotiations said it was “disappointed” that the BMWED union rejected the agreement. But the companies, including BNSF, Union Pacific, Kansas City Southern, CSX and Norfolk Southern, said there was no immediate threat of a strike.
“The parties have agreed to maintain the status quo as they discuss next steps,” they said. “As such, the failed ratification does not present risk of an immediate service disruption.”
In a blog post, the group Railroad Workers United said discontent in some unions is at a “boiling point.”
“This vote will no doubt add a boost to the ranks of the BLET and SMART-TD to emulate their BMWED brothers and sisters and vote NO,” it said.
The deadline given by Mr. Cardwell for further negotiations is five days after Congress will reconvene on Nov. 14, after the midterm elections.
Democratic leaders resisted calls before the September deadline to block a strike and craft legislation that would impose terms recommended by a presidential emergency board on the unions.
Rutgers University professor Todd Vachon, who teaches labor-relations classes, said he’s not entirely surprised the contract was rejected given how emboldened union members feel to fight for better working conditions amid the current worker shortage.
“The biggest sticking issue is quality of life — especially access to paid time off and paid sick time. If the railroads can make some movement in that area, it will likely go a long way with rail workers who currently feel they are not being respected by their employers,” Mr. Vachon said.
“Wages and resource allocation are one important part of contract negotiations, but feeling respected by one’s employer remains one of the top reasons that workers form and join unions,” he said.
• This story is based in part on wire service reports.