WASHINGTON — President Joe Biden said Thursday that freight railway companies and workers had reached a tentative agreement that will avert a rail shutdown that could have paralyzed the economy.
After 20 straight hours of negotiations that came to the brink of a nationwide rail strike, companies agreed to paid sick leave – for the first time – and other demands of unions.
The terms of the deal include:
- Voluntary assigned days off and one additional paid day off (Unions had sought 15 paid sick days. Currently, rail freight workers don’t have any sick days)
- Guaranteed time away for medical visits;
- No disruptions to current health care plans;
- An immediate wage increase of 14% and 24% over the next five years;
- Annual lump sum bonuses of $5,000.
Biden interjected himself directly into the dispute.
According to two White House officials who discussed the president’s involvement on the condition of anonymity, Biden warned both sides by phone that “a shutdown is unacceptable” as differences still remained unresolved Wednesday night.
Ahead of a Friday deadline for a possible worker strike, railroads had prepared to halt the shipment of crops, while shipments of farm fertilizers were delayed this week. Amtrak and commuter railroads had braced for service cuts, disruptions and cancellations.
A strike from freight railroad workers could have further strained supply chains and delivered a damaging blow to Democrats before the midterm elections.
Biden celebrated the deal alongside union leaders and rail executives at the White House Rose Garden, calling it a “big win for America.”
“Together we reached an agreement that will keep our critical rail system working and avoid disruptions of our economy,” the president said, characterizing the deal as “validation” that unions and management “can work together.”
Amtrak cancellations:Amtrak working to restore canceled trips after railroad strike averted with freight deal
U.S. Chamber: rail deal the ‘best outcome’ for Americans
The head of the U.S. Chamber of Commerce called the deal between freight rail workers and companies “the best outcome for the American public” and a testament to compromise on both sides.
Suzanne Clark, president and CEO of the chamber, commended the six largest railroad companies and 12 unions that negotiated up to the brink of a possible rail strike that would have halted the shipment of food, fuel and other critics goods.
“Our nation was very close to a national rail shutdown this week, the effects of which were already beginning to be felt throughout the business community, and would have had devastating impacts to American families and our economy,” Clark said. “We are glad to see a rail strike averted and hope to see future negotiations finalized in a timely manner.”
Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, said the turning point in negotiations came when the unions “finally convinced” the railroad companies to provide workers time off for illness and medical illness.
The agreement only includes one paid sick day, far short of the unions’ goal of 15.
But Pierce said even a single day is an improvement from recommendations by a Presidential Emergency Board that Biden assembled in July to mediate the labor dispute. With the threat of congressional intervention if a deal wasn’t reached by Friday, he said it made it “incredibly hard” to get any paid leave in the final deal.
In addition, the deal gives engineers and other workers voluntary days off – allowing their work schedule to resemble something closer to five days a week rather than a full week – and guarantees they won’t be fired for visiting physicians.
“That’s a big win for us,” he told USA TODAY in an interview. “We actually, for the first time ever, negotiated contract language that prevents the railroads from punishing our guys under the attendance policy to go to the doc. That’s been a critical issue. That wasn’t a paid-leave issue.”
Members of the 12 rail unions must vote to ratify the agreement before it is final.
Pierce said when his members review the deal before voting on it, he believes they will see all the gains. “This is a vast improvement over what that railroad life was like before.”
— Joey Garrison
Amtrak’s cancellations impacted all long-distance trains beginning on Thursday, leaving customers across the country waiting on refunds or new itineraries.
“They told me that they had no new information for me and to call back around 11 or 12 (MT) to see if the train that I was supposed to take had been reinstated,” said Jenna Johnson-Hall, who had her from Utah to Illinois trip canceled. When she did, she said Amtrak still didn’t have any answers and asked her to call back in a few more hours.
“This tentative agreement will keep our trains moving, stations bustling, and employees proudly serving customers as we move them across this great country, stimulating local economies in more than 500 communities we serve,” Amtrak CEO Stephen Gardner said in a statement.
Amtrak cancels trains:Amtrak had canceled long-distance trains ahead of potential strike
Although Amtrak operates services across the country, it actually owns very few of the tracks it uses. Many of its trains outside the Northeast Corridor between Boston and Washington use lines that are controlled by freight railroads. So, a strike by workers on those railroads could affect Amtrak’s ability to operate in their territory.
— Eve Chen
Will other unions seek what the railroad unions are asking for?
The tentative success of rail workers during the collective bargaining process with railroad owners this week is likely being noticed by other industries.
But despite big wins on pay increases and the possible end of a nearly three-year haggling match, it is difficult to compare America’s rail sector to any other.
Experts said Thursday that the nation’s railways are still largely in the hands of only a few companies and unions, so labor actions there are unlikely to translate to success for workers with less leverage.
Still, higher salaries and more sick leave is unlikely to raise price tags for consumers, one said.
“Sometimes there’s a narrative that, ‘Oh, I’m going to have to pay 24% more for fill in the blank,’ ” because that’s the wage increase that’s been proposed, said Carl Van Horn, Distinguished Professor of Public Policy and Director of the John J. Heldrich Center for Workforce Development at Rutgers University. “It doesn’t work that way. The economy is much more complicated than that.’’
— Charisse Jones and Riley Gutiérrez McDermid
Bernie Sanders says ‘real progress’ reached in rail deal
Sen. Bernie Sanders, I-Vt., who blocked a push by Senate Republicans to have Congress set contract terms with rail workers, said the deal represents “real progress” but noted union members must still vote to ratify the agreement.
“I congratulate the unions for standing strong, making it clear that, at a time when the industry is enjoying record breaking profits, they’ve got to treat their workers with respect,” Sanders told reporters.
He added: “When people get sick, needless to say, they should be able to get time off and not worry about being fired.”
– Joey Garrison
As the stalemate moved into Wednesday night, Biden intervened with a 9 p.m. phone call to union heads and carrier executives who met with administration officials in Washington throughout the day.
The president, placed on speaker phone, told the negotiators “a shutdown is unacceptable,” according to two White House officials who discussed the president’s involvement on the condition of anonymity.
He warned of the catastrophic impact that a rail shutdown would have on communities amid already-strained supply chains.
“If one side is moving,” the president told the parties, “the other side has to move, too.”
– Joey Garrison
Railroads are the “backbone of the economy,” Biden said Thursday when praising the tentative deal between unions and railway companies to avert a shutdown.
“I have a visual image of rail being the backbone, I mean, literally the backbone of the economy,” Biden said during brief remarks in the Rose Garden after meeting in the Oval Office with the negotiators who brokered the agreement.
Biden said trains carry everything from clean water, to food and liquefied natural gas – “every good that you need.”
A shutdown would disrupt supply chains and contribute to the persistent inflation on consumer goods.
As Biden turned to go back into the White House, a reporter asked the president what he would say to Americans struggling with the rising cost of groceries.
“With rails moving,” he replied, “it’s not going to go up.”
– Maureen Groppe
As the parties gathered in the Oval Office earlier in the morning, Biden told his favorite stories from his years riding Amtrak and thanked the companies and unions for working through differences.
As a senator, Biden commuted between Washington and Delaware.
“It feels good,” he said, pointing to the 20 hours of consecutive talks on the brink of a potential rail strike. “They should be in bed.”
– Joey Garrison
The deal includes wage increases, bonuses, no increases in copays and deductibles and – for the first time – paid time off for sick workers and exemptions for medical visits. Rail companies’ strict attendance policies had been a sticking point for the two largest unions representing conductors and engineers, which were among the final holdouts.
“The solidarity shown by our members, essential workers to this economy, who keep America’s freight trains moving, made the difference in our obtaining an agreement,” Jeremy Ferguson, president of SMART Transportation Division and Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, said in a joint statement.
The unions’ members must still vote on the contract for it to be finalized.
Labor Secretary Marty Walsh led 20 straight hours of meetings with union and carrier leaders in Washington that spilled into Thursday morning. He applauded a “hard-fought, mutually beneficial deal.”
“Our rail system is integral to our supply chain, and a disruption would have had catastrophic impacts on industries, travelers and families across the country,” Walsh said in a tweet.
– Joey Garrison and Francesca Chambers
Terms beyond recommendations
Negotiations for a new contract between the nation’s six largest freight carriers – Union Pacific, CSX, Norfolk Southern, BNSF, Canadian National and Kansas City Southern – and 12 unions go back nearly three years. Biden appointed a Presidential Emergency Board in July to mediate the dispute. Nine of the unions had already agreed to terms.
By ensuring paid time off for medical visits, the deal goes beyond the recommendations of Biden’s presidential board in a major win for unions that demanded the benefits.
Ian Jefferies, president and CEO of the Association of American Railroads, said a work stoppage would result in an “unnecessary $2 billion daily economic hit,” just as the freight sector moves into peak shipping season.
Biden was personally in touch with railroad companies and union representatives this week to try to avoid a shutdown.
The White House was exploring contingencies including invoking emergency authorities to ensure crucial materials are still delivered if one occurred, according to a White House official, who discussed the talks on the condition of anonymity.
– Joey Garrison
In the end, the unions that threatened a freight rail strike over the labor dispute were the clear winners in the standoff.
“Most importantly, for the first time ever, the agreement provides our members with the ability to take time away from work to attend routine and preventative medical, as well as exemptions from attendance policies for hospitalizations and surgical procedures,” Ferguson and Pierce said in their statement on behalf of their unions.
Republican lawmakers introduced legislation that would have used congressional powers to intervene and adopt the board’s recommendations – which did not offer the paid-time off assurances – for all 115,000 union rail workers.
Sen. Bernie Sanders, I-Vt., opposed Republicans’ push Wednesday to pass the bill via unanimous consent, giving unions times to press for their demands until the end.
– Joey Garrison
The nation’s largest freight rail companies said agreements were reached with the three unions that had held out from supporting a new contract.
Those holdouts, representing about 60,000 rail workers, were:
- Brotherhood of Locomotive Engineers and Trainmen Division of the International Brotherhood of Teamsters
- International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD)
- Brotherhood of Railroad Signalmen
The Association of American Railroads, a coalition representing the rail industry, issued a statement thanking “all unions involved in negotiations for their efforts” and the Biden administration for their assistance.
– Joey Garrison
Amtrak was working to undo the cancellations it had announced for Thursday.
“Amtrak is working to quickly restore canceled trains and reaching out to impacted customers to accommodate on first available departures,” the system announced shortly after Biden relayed news of the tentative agreement.
– Joey Garrison
House Speaker Nancy Pelosi said in a Thursday morning statement that Congress was also considering any actions it could take.
“Congress under the Commerce Clause of the Constitution has the authority and responsibility to ensure the uninterrupted operation of essential transportation services and has in the past enacted legislation for such purposes,” Pelosi said. “Led by the Transportation and Infrastructure Committee, the House prepared and had reviewed legislation, so that we would be ready to act, pursuant to Section 10 of the Railway Labor Act.”
– Joey Garrison
Biden’s loyalties tested
Biden was stuck in a hard spot politically as an outspoken supporter of unions while also desperately wanting to avoid the repercussions of a shutdown.
More than any other modern president, Biden regularly hails organized labor. He said last year his goal is to be “the most pro-union president leading the most pro-union administration in American history.”
A strike and bottlenecked supply chains could have undermined Democrats’ credibility on the economy, giving Republicans new ammunition as they look to regain control of Congress in the November elections.
Such a setback could have halted Biden’s recent momentum. The president is experiencing a bounce in approval ratings after a series of legislative wins in Congress and declining gas prices. And Democrats have been energized by the Supreme Court’s decision to overturn Roe v. Wade, reversing their once-gloomy prospects to maintain control of Congress.
– Joey Garrison