LaHood: Unions should ratify tentative rail-labor contract
11/17/2022
By Julie Sneider, Senior Associate Editor
The rail unions should ratify the tentative agreement with the nation’s major freight railroads for the good of rail workers and the nation’s economy, former U.S. Transportation Secretary Ray LaHood said Nov. 14 during a roundtable discussion on the potential of a national rail strike.
LaHood, a former Republican congressman from Illinois who served as President Barack Obama’s transportation secretary from 2009-2013, said the tentative agreement as signed by the railroads and the presidents of 12 rail labor unions in mid-September “is as good a contract as we’ve seen in a long time.”
The tentative agreement is good for workers in part because President Joe Biden and U.S. Labor Secretary Marty Walsh got involved in the talks after the Presidential Emergency Board No. 250 issued its recommendations for a contract settlement in August, LaHood said. In mid-September, Biden and Walsh led a 20-hour marathon negotiation session between the railroads and unions to head off a rail strike that would have started Sept. 15. The tentative agreement announced after that session is what the unions are now voting on.
"The president and labor secretary are pro-union, pro-worker, and tried to make sure workers are well-taken care of," LaHood said. "This is a very strong contract and should be ratified by the unions still holding out. To me, [the agreement] doesn’t get better."
“A strike doesn't just impact railroads, but every mode of transportation that relies on the railroads.” — Jon Gold, National Retail Federation InsideSources LLCLaHood was one of three panelists to discuss the ongoing labor negotiations during a virtual roundtable hosted by InsideSources LLC on Nov. 14. Also on the panel were Jon Gold, vice president of supply chain and customs policy for the National Retail Federation; and Jerry Glass, president of F&H Solutions Group and an expert in labor negotiations and collective bargaining. InsideSources Managing Editor Michael Graham moderated the discussion.
As of Nov. 15, seven unions have ratified the tentative agreement; three have rejected it; and two — the Brotherhood of Locomotive Engineers and Trainmen and SMART Transportation Division — are expected to announce voting results around Nov. 21. Those that have rejected the package are in a “cooling-off” period in an effort to work out a final settlement.
If the cooling-off periods expire without a final settlement, a strike could occur.
Pay hikes would be 'substantial
The tentative agreement calls for increasing wages 24% during the five-year period from 2020 through 2024, with a 14.1% wage increase effective immediately, according to the National Railway Labor Conference. The contract would also include five $1,000 annual lump-sum payments, adjustments to health care premiums, health benefit enhancements and an additional personal leave day for all employees. Some of the wage increases and lump-sum payments are retroactive, resulting in more than $11,000 on average in immediate payouts to employees.
The wage increases would be the most substantial in decades: The average rail worker’s wages would reach about $110,000 per year by the end of the agreement. When health care, retirement and other benefits are considered, the value of rail employees’ total compensation package — which already ranks among the highest in the nation — would average about $160,000 per year, according to NRLC.
The two major unions that have rejected ratification — the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters and the Brotherhood of Railroad Signalmen — are in cooling-off periods, with the earliest one expiring Dec. 4. After that, if just one union decides to go on strike, all 11 others would walk, too — a scenario that would be catastrophic for the U.S. economy, the roundtable panelists concurred. The Association of American Railroads has estimated a freight-rail strike would cost the economy more than $2 billion a day.
A rail strike would impact industries and workers across the economy, said Gold.
"A strike doesn't just impact railroads, but every mode of transportation that relies on the railroads," Gold said. "This affects everyone along the supply chain. We just went through two-plus years of a major supply-chain crisis that we’re still digging out of. So, if we were to have a strike, it would be shooting ourselves in the foot and causing further disruption that we don’t need."
InsideSources Managing Editor Michael Graham moderated the roundtable discussion. InsideSources LLCThe times, they are unusual
Glass said the failure of some unions to ratify the tentative agreement is an unusual situation based on recent rail-labor history.
"Normally what happens [in negotiations] is you go to the 11th hour, make an agreement, everyone at the table initials the document and then [union presidents] sell the deal hard to their members," said Glass. "This has not happened this time. The presidents of these unions signed the tentative agreement, celebrated it at the White House, and they should stand behind the deal they made."
The main issue holding up ratification by all the unions is paid sick leave. However, that issue was not the unions’ top priority — wages were — when they presented their case to the PEB earlier this summer, Glass noted.
"A little-known fact is that the rail unions had paid sick leave, and years ago they traded it in order to get extended sickness benefits," Glass said. "Now they want to come back and get that sick leave. Anyone who’s done collective bargaining knows that’s not how it works. You have to trade something to get something, and in this case the number-one priority for the rail unions was a pay increase."
If a rail strike occurs, Congress likely would step in to resolve it — a scenario that would not be in the rail workers’ best interests, said LaHood.
"I served in Congress and I can tell you, be careful what you wish for. You do not want Congress to decide your salary and benefits," he said.
Legislation already has been introduced. U.S. Sens. Roger Wicker (R-Miss.) and Richard Burr (R-N.C.) in September introduced a bill that would implement the PEB’s recommendations. That scenario would exclude any additional benefits that were negotiated by the unions and railroads as part of the tentative agreement that the White House announced in mid-September.
"There’s no good reason for these unions not to adopt this [agreement]," LaHood said. "I hope they will for the good of the country and for the good of their people. The union workers are getting the best contract they’ve ever seen in the history of these unions. So, let’s ratify it and let’s move on."
