President Biden today signed the Railway Labor Agreement enforcing the terms of a tentative contract between Class I railroads and rail workers unions and stopping a rail strike that likely would have occurred in one week. After membership of four out of 12 railroad unions declined to ratify the agreement that was reached in September, the real possibility of a strike loomed with the end of an agreed upon cooling off period Dec. 9 - a picket line that the remaining unions pledged to honor. Absent additional concessions in the negotiation process by railroad leadership, the only way to prevent a strike was Congressional action according to the Railway Labor Act. The President last week called on Congress to pass legislation forcing adoption of the agreement, citing the damage a work stoppage could cause the economy, including the potential loss of 765,000 jobs in the first two weeks, communities possibly losing access to chemicals necessary to ensure clean drinking water, and farmers facing an inability to feed their livestock. Class I railroad leadership and several business groups joined in the recommendation over the past several weeks. The House passed the bill enforcing the agreement Wednesday with the Senate following Thursday, each with bipartisan support. Separate action adding seven days of paid sick leave for rail workers failed to gain enough votes in the Senate after narrowly passing the House. The lack of paid sick leave in the new contract was the main hangup noted leaders of those unions that voted the agreement down. An additional Senate option of extending the negotiation window another two months also failed to gain support. Biden today thanked Congress for their speedy action on what he termed a "tough vote" for all involved and called the agreement "the right thing to do" to keep the supply chain stable during the holiday season. Union leadership voiced displeasure at the government action, while Biden did indicate plans to keep working for paid sick leave.
What's in the new railroad contract
Now that the bill has become law, terms of the new five year contract between the railroad workers and Class I railroads are set. First off, it's important to note the deal is retroactive to January 2020, so workers will receive pay raises and yearly bonuses that account for their service back to that date. Some of the terms include:
- A 22% nominal and 24% compounded total salary increase
- Five annual $1,000 bonuses for service recognition
- One additional paid day off
- Time off for certain medical events (routine & preventative medical care, hospitalizations and surgical procedures)
- Provisions to create voluntary assigned days off for members working in thru freight service
- A freeze on members' monthly health care contributions at the end of the agreement
Oh, and remember the retroactive nature of the agreement? That also means the contract is up at the end of 2024, so it likely won't be very long before negotiations on the next deal come up in the news cycle.
Looking for help moving freight by rail or otherwise? Drop us a line here at InTek Freight & Logistics, and we'll discuss how you can put us to work for your company. Get more information about freight and logistics - and what we do at InTek - at our Resources page. Or you can start with a few of the links below:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions
