Industry groups call for a Presidential Emergency Board to settle rail labor dispute

A pair of prominent Washington-based business groups—the National Retail Federation (NRF) and the U.S. Chamber of Commerce—respectively sent letters this week to President Biden, calling on the White House to work with Class I rail carriers and 12 U.S.-based rail labor unions on reaching labor accord.The impetus for these letters stems from a June 17 announcement made by the National Mediation Board (NMB), an independent U.S. federal government agency that facilitates labor-management relations within the nation’s railroad and airline industries, confirming that “pursuant to the Railway Labor Act, the National Carriers’ Conference Committee (NCCC) and the twelve unions…were released by the NMB from statutory Mediation on June 17, 2022, and a 30-day cooling-off period begins on June 18, 2022.”

NMB added that as part of an initiative to help the parties in reaching agreements, it is scheduling public interest meeting, which are set to begin on July 12. The 12 U.S.-based rail labor unions include: the American Train Dispatchers Association (ATDA), Brotherhood of Locomotive Engineers and Trainmen (BLET), Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED), Brotherhood of Railroad Signalmen (BRS), International Association of Machinists and Aerospace Workers (IAMAW), International Brotherhood of Boilermakers, Iron Ship Builders, Forgers and Helpers (IBB), International Brotherhood of Electrical Workers (IBEW), National Conference of Firemen & Oilers, District of Local 32BJ, SEIU (NCFO), International Association of Sheet Metal, Air, Rail and Transportation Workers – Railroad, Mechanical and Engineering Department (SMART-MD), International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division (SMART-TD), Transportation Communications Union/IAM (TCU/IAM), and the Transport Workers Union of America (TWU).

In his letter to President Biden, NRF President and CEO Matthew Shay wrote that the current rail labor situation, in the wake of the NMB’s recent decision, has the potential for additional supply chain disruptions, adding that NRF and its members are concerned about the current status of negotiations and the potential for system-wide disruption in September, when Peak Season is in full swing and tied to back-to-school and holiday shopping.

“NRF and its members are concerned about the potential for U.S. freight rail disruptions stemming from the National Mediation Board’s premature release of the parties from labor negotiations,” wrote Shay. “We urge the administration to encourage the parties to come back to the table where they can make their own fair and mutually beneficial agreement. Intermodal rail shipments have been the largest source of rail traffic over the past few years, and an overwhelming portion of those movements are tied to consumer goods. In the first part of 2021, railroads moved the most intermodal goods ever, and while such movements are down this year, they remain at a high level.

Shay explained that if the railroads and unions do not return to the negotiating table the White House needs to appoint respected, experienced, and impartial arbitrators to a Presidential Emergency Board (PEB), which he described as critical to avoid a strike and ensure systemwide fluidity.

“Congress can also play a role in supporting this basic need for a credible PEB near-term, and longer-term—if necessary—enacting policies such as mandating a longer cooling-off period to prolong negotiations,” he wrote. “Not only would the appointment of a credible PEB be consistent with past political precedent, but it would also send a signal to the negotiating parties, as well as the large number of rail customers like retailers, that policymakers want an agreement above all else and will not tolerate rail service disruptions. Ultimately, we continue to implore the parties to resolve this bargaining round on their own. In the event they do not, however, we ask you to be prepared to act to protect the supply chain and ensure no interruption to rail service. Especially now, we need political leaders to do all they can to ensure the parties’ negotiation process concludes with a fair agreement and no interruption to rail service.”

The call for the White House to appoint a PEB was echoed by U.S. Chamber President and CEO Suzanne Clark in a letter to Biden. Clark explained that the PEB needs to be comprised of individuals who are impartial, belong to the National Academy of Arbitrators, and have direct experience in resolving rail disputes.

“It is imperative that the Administration act to prevent any disruption to America’s rail service,” wrote Clark. “The U.S. business community faces enormous challenges today from record inflation, labor shortages, and ongoing supply chain disruptions due to the COVID-19 pandemic. And we are now facing uncertainty over the possibility of further disruptions during preparations for the holiday shopping season. Any breakdown would be disastrous for U.S. consumers and the economy, and potentially return us to the historic supply chain challenges during the depths of the pandemic. We remain optimistic that both sides will be able to resolve their differences and voluntarily reach a new agreement. However, the Administration’s next steps will be critical in this regard.”

From the railroads’ perspective, the National Carriers’ Conference Committee (NCCC), an organization representing the nation’s freight railroads in national collective bargaining, expressed its disappointment in a mid-June statement, about how the parties were unable to reach voluntary agreements in mediation.

“It remains in the best interests of all parties—and the public—to settle this dispute, provide for prompt pay increases for all rail employees, and prevent rail service disruptions,” it said. The railroads have worked to address issues raised by both sides in the negotiations and have offered pay increases that are consistent with labor market benchmarks and reward rail employees for their essential work. The railroads’ proposals would continue to place rail employee pay and benefits among the best in the nation. The NCCC remains willing and available to negotiate at any time over mutually acceptable terms. The NCCC will also look forward to demonstrating to the expected Presidential Emergency Board how the railroads’ proposals appropriately reward rail employees’ hard work and skills while best positioning the industry to grow and compete for traffic in the nation’s highly competitive freight marketplace.”

In a statement provided to LM, the Association of American Railroads (AAR) said that railroads and their invaluable employees are best served when parties reach agreements voluntarily.

“The industry remains committed to doing so, including by rewarding employees with highly competitive compensation and benefits,” said AAR. “We hope all parties will work together to avoid any potential disruptions, including policymakers to the extent they are involved.”