Flurry of contract deals come as railroads, unions see Trump's election looming over talks

[November 14, 2024]  By JOSH FUNK

OMAHA, Neb. (AP) — The flurry of contract agreements announced early this fall — including two more Wednesday — offer evidence that major railroads and their unions are working to avoid the standoffs that led them to a brink of a national strike two years ago.

Both sides are also now keenly aware that President-elect Donald Trump — who has a track record of supporting big businesses — would be the one ultimately appointing the people who would help resolve the contract dispute this time if they can't work something out themselves.

“I think overall it may lead the unions and employers to want to bargain more intensively and come to agreements sooner,” said Todd Vachon, who teaches in the Rutgers School of Management and Labor Relations.

But it still won’t be easy to satisfy all the workers who remain concerned about the widespread job cuts and have seen much bigger raises in other labor disputes.

Current contracts don't expire until July but the National Carriers Conference Committee group that negotiates on behalf of the railroads said in its statement at the start of the talks on Nov. 1 that it was hoping for an early resolution. And just Wednesday, the railroads announced two new tentative agreements with the Transportation Communications Union and the Brotherhood of Railway Carmen.

The railroads play such a crucial role in the economy that the president and Congress have the power to intervene because so many businesses rely on them to deliver their raw materials and finished goods. The Railway Labor Act that governs railroad contract talks dictates that if the two sides can't reach an agreement, the dispute could wind up in the hands of a special board of arbitrators the president appoints that would hear from both sides and recommend a deal. That happened in 2022 — though the industry still reached the brink of a strike.

The two unions that inked deals Wednesday and several others among the 12 rail unions had already reached some agreements with CSX, Norfolk Southern and BNSF railroads even before the formal talks began between the unions and a coalition of railroads that includes Norfolk Southern, BNSF and Canadian National. The other major railroads — CSX, Union Pacific and CPKC — have decided to bargain individually with their unions.

“I think we all saw the perils of going through that again,” Norfolk Southern CEO Mark George said about the yearslong battle the industry engaged in last time that created “a lot of anxiety and uncertainty in the labor force.”

The industry has also made strides over the past two years toward addressing some of the quality-of-life concerns that nearly led to a strike in 2022 before Congress and President Joe Biden intervened. In the two years since the nation’s freight railroads nearly ground to a halt, the industry has offered paid sick time to 90% of them — at the urging of the Biden administration and other officials — and most railroads have promised to improve the unpredictable schedules of train crews who were generally on call 24-7 without any idea when their next day off might come.

As a result, the relationships between the major freight railroads and the dozen different unions that represent their workers have generally improved, though they remain strained at times.

The president of the largest rail union that represents conductors — SMART-TD — Jeremy Ferguson said, “We've come a long way in two years.” But many workers still feel overworked and underappreciated by the railroads after the job cuts made in the name of efficiency in recent years.

A worker boards a locomotive at a BNSF rail yard, Sept. 14, 2022, in Kansas City, Kan. (AP Photo/Charlie Riedel, File)

CSX's CEO Joe Hinrichs, who has led the industry with the first sick-time deals and other efforts to show employees they are appreciated, said he's optimistic about the prospects for deals.

“We’re in a dramatically different place than we were two years ago, that’s for sure,” Hinrichs said. “I think what’s gotten us there is just everyone stepping back at CSX and at the unions and saying, OK, no one was satisfied what happened last time. What are we going to do differently this time?”

A bunch of those early deals were ratified this fall, not long after the first ones were announced in the midst of the labor dispute that brought Canadian National and CPKC railroads to a halt for a few days in Canada. But more recently, deals that offer 18.8% raises and improved vacation and health benefits over five years have been getting voted down after workers at Boeing and the East Coast ports secured deals with much larger raises following their strikes.

Josh Hartford with the Machinist Union's District 19 rail division said that with a deal with CSX already out for a vote when the longshoreman secured their big raises, there wasn't enough time to explain why this contract — coming on the heels of the 24% raises rail workers received in their last contract — might be considered a good deal. The port workers had gone longer without a new deal before this one that includes 62% raises.

But Hartford said “the morale is still poor” on most railroads after all the cuts and there is a strong feeling among some workers that maybe they could get more if they fight longer, so the Machinists rejected that deal. Conductors have also voted down all but one small deal on part of BNSF they have considered so far, and the Brotherhood of Locomotive Engineers and Trainmen union has been unwilling to sign onto any of these early deals. Plus, the third largest union that represents track workers split on the deals it voted on so far.

So getting all the unions to agree won't be easy. Consider that BLET is locked into a lawsuit with Union Pacific trying to get that railroad to deliver the schedule improvements it promised, and SMART-TD is headed into arbitration on scheduling issues at UP and crew size details at BNSF.

BLET union president Eddie Hall said his organization that represents engineers “wasn’t going to rush into deals that didn’t deliver.”

“Some of the deals that were reached early by other unions were hurried and failed to meet the needs of those railroaders who operate trains,” said Hall, who cited concerns about the expanding use of remote-control trains, the ever-increasing length of trains and the impact of all the job cuts.

But the pressure will be on the unions to settle because the Biden administration won’t be there anymore to lean on the railroads, said Virginia Commonwealth University professor Victor Chen, who studies labor issues as a sociologist.

“I expect the Trump 2.0 administration will continue with its earlier playbook of blocking unions at every turn. In negotiations, the unions will need to keep in the back of their minds that the White House will no longer step up for them the way that Biden did,” Chen said.

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