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Railway Labor Standoff Tests Biden’s Clout With Unions, Workers

Nov. 22, 2022, 10:00 AM

The labor standoff between freight railroads and unions is barreling toward a crisis for President Joe Biden: An increasingly likely nationwide strike that’s already testing his ties with union voters.

The largest railroad union Monday voted down a tentative agreement brokered by the Biden administration in September, a rank-and-file rejection that will likely force the president to choose between organized labor and big business before a Dec. 9 strike date. In doing so, Biden and congressional Democrats risk betraying a group that just helped them retain the majority in the Senate, and will be crucial to Biden’s re-election prospects in 2024.

“It’s a vice of the Democratic Party’s own making,” said Ron Kaminkow, general secretary of Railroad Workers United, an independent group that opposes the tentative agreement and lawmakers’ intervention. “If we’re defeated, an injury to one is an injury to all.”

The tentative agreement narrowly failed a vote of the SMART-Transportation Division, which represents 37,000 workers, with less than 51% of train and engine service workers choosing to reject it and 62% of yardmasters voting to ratify it. The Brotherhood of Locomotive Engineers and Trainmen, the second-largest union, voted to approve the agreement Monday.

But a strike from just one of the 12 unions involved in the negotiations could trigger a nationwide lockout or strike, either prompting rail companies to shutter operations or keeping other unions from crossing a picket line.

Jared Cassity, the alternate national legislative director for SMART-TD, said in an interview Monday he’s not optimistic that freight rail companies will continue negotiating—suggesting that a strike is all but inevitable.

“There is nothing that obligates them to give any more at this point,” Cassity said. “We’re at the end of the Railway Labor Act, and ultimately the end is a lockout or strike. That’s where we are.”

Few Options Ahead

Four unions have now rejected the proposed labor pact, which sought to address long-festering complaints about schedules and sick time, but fell short in the eyes of some workers.

There are only three options left to resolve the dispute—if the parties reach a new agreement voluntarily; if Congress steps in and imposes an existing agreement; or if lawmakers and the White House do nothing, letting the workers go on strike just before Christmas.

The last scenario is seen by many—including Biden—as untenable. A supply chain crisis during the holidays would not only anger scores of Americans, but could further fuel inflation that’s dogged Biden’s presidency.

Well aware of the stakes, in September the president deployed Labor Secretary Marty Walsh to lead an all-night negotiating session that produced a tentative agreement, showering praise on both sides in a meeting at the White House the next morning.

“Together, we reached an agreement—you reached an agreement—that will keep our critical rail system working and avoid disruptions of our economy,” Biden said in the White House Rose Garden on Sept. 15.

Two months later, that agreement—seen as a landmark achievement by the administration— is on the verge of unraveling.

“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,” a White House official said Monday. “A majority of unions have voted to ratify the tentative agreement, and the best option is still for the parties to resolve this themselves.”

Support at Risk

Breaking with organized labor, however, also carries risks. Biden staked his bid for the White House on unions from the beginning, holding his first campaign rally in 2019 at a Teamsters hall in Pittsburgh flanked by union leaders. He went on to win 57% of union households nationwide in the general election, and has since claimed to be the most union-friendly president in history.

Unions, who have stuck by the president thus far, in turn played a critical role in the midterms in winning Pennsylvania for US Senate candidate John Fetterman, helping Democrats keep the majority.

But that might not stop lawmakers siding with railroads to protect the broader economy. Congress has the authority to unilaterally impose an agreement to avoid a nationwide rail shutdown, and did so in 1991 with near-unanimous support. The Association of American Railroads and the Consumer Brands Association urged Congress to step in Monday, saying that a work stoppage would cost the US economy $2 billion a day.

Cassity, with SMART-TD, said the threat of congressional intervention gives railroad companies unfair leverage—the main reason he believes railroads will walk away from the bargaining table.

“I’m not optimistic about the railroads’ willingness to negotiate for more,” Cassity said. “I’m hopeful, but really not that optimistic. And there’s really nothing that obligates them to give more at this point.”

Railroad Workers United’s Kaminkow said Democrats risk longer-term consequences souring their relationship with organized labor at a time when support for unions is the highest it’s been in half a century.

“Give these people what they want. Period. End of story,” he said. “This is what the Democrats could do, and they could be heroes of working-class people in this country.”

— With assistance from Jordan Fabian (Bloomberg News)

To contact the reporter on this story: Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editor responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloombergindustry.com