Third Largest Rail Union REJECTS Biden’s Brokered Deal to Avoid Strike: Stock Up America, It’s Coming

The third largest rail union in the country has rejected a Biden administration brokered deal with freight railways on Monday over concerns regarding working conditions, renewing the possibility of a strike next month that could cripple the economy.​

But before a strike could happen, it will force both sides back to the bargaining table to avoid the possibility of apotentially devastating strike.

The vote by the Brotherhood of Teamsters (BMWED) of which over half of the track maintenance workers are members, voted to oppose the five-year contract despite 24% raises and $5,000 in bonuses. There were nearly 12,000 members casting a ballot with 56% being opposed, according to a BMWED press release. Tony Cardwell, President of BMWED said that workers were still concerned about working conditions and the lack of paid time off, particularly sick leave or time, according to the Associated Press report released on Monday. Workers were also concerned about the major railroads who have eliminated nearly one-third of their jobs over the past six years.

“The majority of the BMWED membership rejected the tentative national agreement and we recognize and understand that result,” Cardwell said in the BMWED press release. “BMWED members are concerned with the directions of their employers and the mismanagement and greed in which they have consistently implemented, and are united in their resolve to improve their working conditions across the entire Class I rail network.”

The National Railway Labor Conference (NRLC) said in a Monday statement, “We are disappointed that members of the BMWED have declined to ratify the recent tentative agreement (TA) between the BMWED and the nation’s freight railroads.” The NRLC went on to discuss the benefits of the deal, including travel reimbursements of up to 50% for those employees in traveling roles.

Four other railroad unions have approved their agreements with freight railroads including BNSF, Union Pacific, Kansas City Southern, CSX, and Norfolk Southern, but all 12 unions representing 115,000 workers must ratify their contracts to prevent a strike. Another union, the International Association of Machinists and Aerospace Workers, initially rejected its deal but has since renegotiated a new contract. Voting will be completed in mid-November. 

By rejecting the deal, the BMWED will return to negotiations with railways, entering a “status quo” period where unions cannot strike until November 19 five days after Congress reconvenes, the BMWED stated.

Rutgers University professor Todd Vachon, who teaches labor relations classes, said he’s not entirely surprised the contract was rejected given how emboldened union members feel to fight for better working conditions, amidst the current worker shortage.

Vachon added, “The biggest sticking issue is quality of life, especially access to paid time off and paid sick time. If the railroad can make some movement in that area, it will likely go a long way with rail workers who currently feel they are not being respected by their employers. Wages and resource allocation are one important part of contract negotiations, but feeling respected by one’s employer remains one of the top reasons that workers form and join unions.”

Vachon concluded, “Although a strike is now possible, I’m not too worried yet because both sides have more than amonth to reach a new agreement.

The consequences on the U.S. economy could be a disaster. The United States relies on railways to ship key products such as oil, coal and chemicals used in fertilizers, leading to disruptions that could cause $2 billion per day in economic damages, according to the Association of American Railroads, who represent railway management. Nearly 40% of all long-distance trade in the U.S. occurs on rail, and replacing them with trucks would require a fleet of nearly half a million trucks, a logistical impossibility, according to the American Trucking Association.

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