A union representing about 12,000 rail workers on Monday rejected a tentative deal brokered by the White House last month ahead of a possible rail strike.
This vote will force the two sides back to the negotiating table and create the possibility of a nationwide strike. The potential work stoppage could cripple the country’s supply chain and haul rail service later this fall as the U.S. begins the peak holiday season.
Four unions have ratified contracts based on the White House-brokered agreement, while seven have to vote on the deal. The eleven unions represent around 115,000 railway workers.
The two largest rail unions — the Brotherhood of Locomotive Engineers Trainmen (BLET) and the SMART Transportation Division (SMART-TD), which account for about half of all rail workers — are due to complete their vote by the middle of next month.
The Teamsters’ Brotherhood of Maintenance of Way Employes Division, or BMWED, rejected the interim contract over frustration over pay and working conditions, particularly a lack of paid sick leave, BMWED President Tony Cardell said in a statement Monday.
“Railway workers don’t feel valued,” Cardell said. “They resent management not considering their quality of life.”
The National Carriers’ Conference Committee (NCCC), the group representing rail freight companies, said in a statement there was no risk of immediate operational repercussions as a result of this vote. But the NCCC expressed “disappointment” at the decision to reject the contract.
The tentative deal included a 24% wage increase and $5,000 in lump sum payments, as well as “significant increases” in travel and away-from-home reimbursements for the roughly 50% of BMWED members who are employed in traveling roles, the NCCC said.
US railroad companies and unions reached a tentative collective bargaining agreement last month despite the threat of strikes. This agreement came after 20 consecutive hours of negotiations conducted by US Secretary of Labor Marty Walsh in his Washington, DC office. said Walsh Last month.
The agreement improved exemption rules at the railway companies, which was a major sticking point in the negotiations, BLET and SMART-TD said in a statement last month.
A potential strike could result in $2 billion a day in lost economic output, according to the Association of American Railroads, which advocates for railroad companies.
Rail is critical to the entire freight side of the economy, including agriculture, manufacturing, retail and warehousing. Railroads are responsible for moving 40% of the country’s long-haul freight, and a work stoppage could put those shipments at risk.
“The artery of the US economy is the rail system. It’s one of the ways we move everything around. A third of everything gets around this way, global tax firm KPMG told ABC News last month.