Workers at two of the country's biggest rail unions split over a tentative contract their leaders had hashed out with freight rail companies — leaving open the possibility of a debilitating rail strike in the middle of the holiday season.
The 28,000-member SMART-TD union, which represents rail conductors, rejected the contract after one of its divisions voted it down.
Members of the Brotherhood of Locomotive Engineers and Trainmen, which represents some 24,000 freight train engineers, voted in favor of the deal.
The no vote is a rejection of the compromise worked out in September with the help of the White House and Labor Secretary Marty Walsh. Several unions have signaled their discontent primarily over the proposed contract’s lack of fully paid sick leave and other scheduling requirements.
Union leaders said Monday they were ready to go back to the bargaining table.
“This can all be settled through negotiations and without a strike," Jeremy Ferguson, the president of the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers, or SMART-TD, said in a statement. "A settlement would be in the best interests of the workers, the railroads, shippers and the American people.”
But if any one of the unions decides to strike, all 12 unions will honor it, bringing the system to a standstill. A strike could also affect the country’s commuter rail system, with the potential to halt some lines serviced by freight rail workers, and cause backlogs and traffic snarls on others.
“We stood shoulder to shoulder with our brothers and sisters in SMART-TD and others in rail labor throughout this process, and we will continue to stand in solidarity with them as we approach the finish line in this round of negotiations,” Dennis Pierce, the president of the Brotherhood of Locomotive Engineers and Trainmen union, or BLET, said in a statement.
The National Carriers’ Conference Committee, which represents rail companies in the bargaining process, warned about the economic impact of a strike.
“Now, the continued, near-term threat of one will require that freight railroads and passenger carriers soon begin to take responsible steps to safely secure the network in advance of any deadline,” it said in a statement. “Should the unions without ratified agreements remain unwilling to do so, they are expected to strike and Congress may need to intervene — just as it has in the past — to prevent disruption of the national rail system.”
Commuter rail lines that could be impacted by a strike include: Metra, Chicago’s commuter rail network; Washington D.C. area MARC and VRE; Caltrain in the San Francisco Bay Area and Metrolink in Southern California. Travel on Amtrak could also be significantly impacted since the majority of its tracks —with the exception of the busy Northeast corridor— are owned and maintained by freight railroad companies. SEPTA in the Philadelphia area, and New Jersey Transit both said earlier this year that their operations would not be significantly impacted.
The rail companies and the unions still have two and a half weeks to return to the table to try to iron out a new deal. Congress has the potential to step in and force an agreement or end a potential strike. Congressional leaders have been tight-lipped about their plans in the event that negotiations fail.
But if the parties are unable to do so by Dec. 8, the unions could strike the next day.
The vote is the latest reflection of broader workforce dissatisfaction, compounded by the pandemic and high inflation.
In interviews, many workers across industries expressed frustration at watching benefits instituted during the pandemic expire, such as pay bonuses and sick time. Others point to the staggering financial success of many companies during the global public health crisis — one that saw an untold number of workers fall sick on the job.
None of these other labor disputes — from strikes at employers such as John Deere and the University of California, to walkouts and new organizing campaigns at companies such as Amazon, Starbucks and Apple — have had the potential to bring such wide swaths of the country's economy to a halt.
The freight rail system is responsible for about 30% of cargo movement in the country, and business groups have been warning for months about the economic fallout from a strike.
The Association of American Railroads, the trade group which represents the rail companies, estimates losses of $2 billion a day. The American Chemistry Council, which represents producers of products such as epoxy, polyurethanes and chlorine, ballparked that a monthlong strike could cost the economy 700,000 jobs and $160 billion and send inflation spiking.
Members of SMART-TD and BLET, the conductors and engineers who staff the system's trains in two-person teams, have told NBC News in interviews that they are frustrated with scheduling policies instituted by some of the rail companies during the pandemic that leave workers on call around the clock every day.
The railroad companies say that workers are already well compensated. The 24% raises over five years they agreed to in the last round of negotiations will bring the average pay up to $110,000 by 2024, the Association of American Railroads says.
In general, the freight rail industry enjoys far higher profit margins than other logistics businesses operating by air or ground and industry groups and federal officials, including Surface Transportation Board Chairman Martin J. Oberman, have complained that the companies have been cutting employment and raising prices at the expense of service.
The negotiations are complicated by the detailed set of rules pertaining to rail workers and the large number of parties involved in the negotiations.
Rail workers get to vote on any agreement their leadership makes with the companies. Of the 12 unions that are negotiating contracts with the seven biggest rail companies, members of eight have opted to ratify their contracts. Including the latest SMART-TD vote, four have rejected it.
Rep. Peter DeFazio, the chairman of the House Transportation and Infrastructure Committee, told reporters last week that he was “hoping the railroads will get reasonable.”
“This is the 21st century and to have skilled workers being denied sick leave, even unpaid sick leave, is unconscionable,” he said. Rail companies “are watching their record profits. ‘Oh, my God, if we give people paid sick leave, our stock might drop by a dollar.’ Give me a break.”
House Speaker Nancy Pelosi’s office did not immediately respond to a request for comment.