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Rail News Home Labor

November 2011

Rail News: Labor

The railroad-rail labor contract: Of what ifs and work stoppages — by Pat Foran

A low-hum of a buzz (like a cell phone on “vibrate”) was emanating from rail country early this month as leaders at 30-plus U.S. railroads and thousands of workers awaited the recommendations of a Presidential Emergency Board (PEB) investigating the wage and health care dispute between the National Carriers’ Conference Committee (NCCC) and 11 rail unions. The source of the hum was a series of soon-to-be-answered questions: Would the PEB recommendations help the parties reach an accord or would one or both parties reject them, setting the stage for a work stoppage? If there is a work stoppage, what kind of impact would it have on the recovery — the economy’s? Rail’s?

(Editor's note: The PEB issued its recommendations a few days after this piece was written.)

Contract negotiations between rail carriers and 13 unions began in 2009. In September, the NCCC and United Transportation Union (UTU) reached a deal. The pact, which covers 40,000 UTU members, includes a 17 percent wage increase over 60 months and a 78-month cap on health insurance contributions.

NCCC and the railroads maintain that the UTU pact should serve as a “pattern” agreement. Officials at the Rail Labor Bargaining Coalition and The Coalition of Rail Unions, which represent 75 percent of the workers at more than 30 railroads, disagree. Citing the record profits railroads have been posting, they maintain that general wage increases should be greater than the ones agreed to in the last bargaining round. They’ve also asked that the PEB recommend no changes to health care benefits.

Typical Or Atypical This Time?

The PEB — the first since 2007 — was to issue its recommendations to the White House within 30 days, or by Nov. 5, which will have passed by the time you read this. The railroads/unions then would have 30 days to accept or reject the recommendations, or come to terms on their own. The 30-day period expires at 11:59 p.m. on Dec. 5. If they can’t come to terms, either party can exercise “self help” — the unions can strike and the railroads can implement a lock-out.

Strikes and lock-outs are rare. Since 1996, there haven’t been any days lost from a national railroad work stoppage, says Frank Wilner, who’s written two books on the Railway Labor Act (“The Railway Labor Act and The Dilemma of Labor Relations,” and “Understanding the Railway Labor Act”).

“The Railway Labor Act was intended to limit work stoppages on railroads primarily to prevent the interruption of interstate commerce,” says Wilner, who also is a spokesman for the UTU. “Virtually everyone that studies the Railway Labor Act reaches the conclusion that the law does work in that regard.”

But what if there is a work stoppage this go-round? If precedent is any indication, Congress would step in. Since World War II, there hasn’t been a national railroad strike that’s lasted more than a few days because “Congress will just not permit it to happen,” Wilner says.

Typically, Congress would pass a law requiring the parties to accept the PEB’s recommendations. But in this political climate, “typically” isn’t always a word that applies.

Might that be enough to spook both sides of the dispute aisle to come to a voluntary agreement? I’m not enough of an intuit to divine whether either side has drawn a line in the sand, but if the PEB recommendations represent something of a compromise version of the “pattern” pact, they might serve to foster some “art of the deal” work.

If not, and there is a work stoppage, it’ll be brief, but it’ll drag an already slow economic recovery. There are less disruptive ways to underscore the significance of the rail link in the economy chain, so here’s hoping.


Pat Foran, Editor



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