Market Matters Blog

On June 18, after nearly two years of contract negotiations with Class 1 railroads, U.S. rail workers entered a 30-day cooling-off period which ends on July 18.

At any point during the 30-day cooling-off period, President Biden may appoint a Presidential Emergency Board (PEB), which typically consists of three to five members. If that happens, it would start a second cooling-off period, and the parties may choose to accept or reject the PEB's recommendation. If either party rejects the PEB's recommendation, or if the cooling-off period expires and the dispute has not been resolved, either party may engage in self-help.

If no agreement is reached between the parties after the cooling-off periods end, congressional intervention could be all that prevents a national shutdown. Rail shippers don't want to wait that long.

On July 1, a coalition of rail shipper CEOs representing agriculture, manufacturers, refiners, and energy producers, sent a letter to President Biden saying they are "deeply concerned" about the possibility of a work stoppage if a negotiated solution to the current rail contract negotiations fails to emerge. "We urge the Administration to take action to facilitate a workable settlement and prevent catastrophic disruptions to the freight rail network."

The letter noted that "It is of critical importance to all sectors of the economy that these parties reach an amicable agreement and avoid any service disruption. Therefore, our organizations respectfully request the utilization of your authority under the Railway Labor Act, to immediately appoint respected, experienced, and impartial arbitrators to the PEB. The appointment of arbiters with rail related expertise would be particularly important to ensuring a positive outcome to the process." https://www2.dtn.com/…

On July 6, the U.S. Chamber of Commerce president and CEO Suzanne Clark sent a letter to President Biden noting that "The National Mediation Board's (NMB) decision to release the Class I freight railroads and the twelve rail unions from mediation presents a new challenge to the U.S. business community, which is already navigating a difficult environment. Unless the Administration acts, either party is free to exercise "self-help" options – including a strike – beginning on July 18, 2022." https://www.dtn.com/…

She is referring to the June 24 news release from the Brotherhood of Locomotive Engineers and Trainmen (BLET) saying it began mailing ballots to more than 23,000 members seeking authorization for the Union's leadership to call a strike should one become necessary to settle the current national contract dispute with the nation's largest rail carriers. This is a mandatory step required by the Brotherhood's internal law as the Union approaches the point where self-help becomes a legal option to both labor and management, noted BLET in a news release.

"Let me emphasize that authorization does not mean a strike will occur, nor does it mean that all railroads may be struck," BLET National President Dennis R. Pierce said. "Now is the time to deliver a unified message to the carriers that their contract proposals are unacceptable to BLET's membership and that we stand united."

At any point during the 30-day cooling-off period, President Biden may appoint a Presidential Emergency Board (PEB), which typically consists of three to five members. If that happens, it would start a second cooling-off period, and the parties may choose to accept or reject the PEB's recommendation. If either party rejects the PEB's recommendation, or if the cooling-off period expires and the dispute has not been resolved, either party may engage in self-help.

Clark said that "It is imperative that the Administration act to prevent any disruption to America's rail service."

Link to DTN story with info on stalled negotiations and what happens next "Years of Contract Negotiations Between Railroads and Workers Stall": https://www.dtnpf.com/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

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