Rail union rejects contract as strike threatens U.S. economy before holidays

One of the largest railroad unions narrowly voted to reject a contract deal brokered by the White House, bringing the country once again closer to a rail strike that could paralyze much of the economy ahead of the holidays, union officials announced on Monday.

The union SMART Transportation Division voted the deal down by 50.9%, the union said. The Brotherhood of Locomotive Engineers and Trainmen, which represents engineers, announced 53.5% of members voted to ratify the deal. The two are considered among the most politically powerful of the 12 rail unions in contract discussions.

A national rail strike, which could happen as early as Dec. 5, would threaten the nation’s coal shipments and its supply of drinking water, while shutting down passenger rail and shipment of goods as the holiday season revs up. The U.S. economy could lose $2 billion a day if railroad workers strike, according to the Association of American Railroads.

The move highlights months of tension between unions and companies across a variety of sectors, as companies have been dealing with labor shortages and workers have taken advantage of more leverage in the workplace to press for better working conditions, more sick pay and more flexible schedules in the aftermath of the pandemic.

The rejection of the contract adds new pressure to the White House, which had been closely involved in negotiating the contract between the unions and rail companies. A shutdown of the nation’s transportation infrastructure heading into the holiday season would spell a political disaster.

“As the president has said from the beginning, a shutdown is unacceptable because of the harm it would inflict on jobs, families, farms, businesses and communities across the country,” according to a White House official. “A majority of unions have voted to ratify the tentative agreement, and the best option is still for the parties to resolve this themselves.”

Already seven of 12 unions have voted to approve their contracts. But in recent weeks, three of the smaller unions have also rejected their contracts and are back in negotiations.

The main sticking points for rank-and-file members have been points-based attendance policies that penalize workers for taking time off when they are sick or for personal time, and contribute to grueling, unpredictable schedules that weigh on workers’ mental and physical health, they say. In June, a 51-year-old union engineer put off a doctor’s visit and died of a heart attack on a train weeks later, his family said.

Jared Cassity, the national legislative director at SMART Transportation and a conductor, said members voted to reject the contract because they are angry and stressed over points-based attendance policies.

“It’s about attendance policies, sick time, fatigue and the lack of family time,” Cassity said. “A lot of these things that cannot be seen but are felt by our membership. It’s destroying their livelihoods.”

Cassity said the union would likely immediately resume negotiations with rail carriers as their strike deadline looms on Dec. 8.

But two smaller unions, the Brotherhood of Maintenance of Way Employees and the Brotherhood of Railroad Signalmen, have rejected their contracts and would be allowed to strike or companies would be able to impose a lockout even sooner, right after midnight Dec. 5, unless Congress intervenes.

If those unions strike on Dec. 5, all of the unions would likely move in solidarity, provoking an industry-wide work stoppage.

The Association of American Railroads President CEO Ian Jefferies said in a statement that the group’s freight companies are ready to reach new contract agreements with unions but warned that “the window continues to narrow as deadlines rapidly approach.” There are some 30 rail carriers including Warren Buffett’s BNSF, Union Pacific, CSX, Norfolk Southern, Kansas City Southern Railway and Canadian National.

“Let’s be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy,” Jefferies said.

Earlier this summer, after an impasse in negotiations, the White House appointed an emergency board to mediate the dispute between rail carriers and the unions. But many of the unions rejected that agreement.

In late September, with less than 48-hours to spare before a railroad shut down, Biden and other top administration officials helped negotiate a last-minute agreement. Points-based attendance policies had been at the heart of that dramatic showdown.