A Presidential Emergency Board (PEB) on Aug. 16 published a report outlining several recommendations to resolve longstanding contract differences between the US Class 1 railroads and 12 unions representing 115,000 rail workers.
The PEB was appointed by President Biden in July to avert a strike after earlier efforts by the National Mediation Board (NMB), an independent federal agency that mediates railroad and other labor agreements, failed to bring the two sides together on disagreements over wages, health care benefits, and scheduling (GM July 15, p. 1).
The PEB recommended a 22% wage increase, along with $5,000 in service recognition bonus payments, over the five-year life of the contract retroactive to Jan. 1, 2020, according to the Trains magazine News Wire.
The board also recommended what it called “modest improvements” in the existing health and welfare benefits package, including the expansion of hearing and speech therapy benefits, while also removing caps on employees’ monthly contributions to their health coverage, Bloomberg Law reported. It also would increase coverage for travel costs when rail workers are assigned to work away from home, among other changes.
The recommended 22% wage hike, which is the largest general wage increase for rail workers in nearly 40 years, is below the 28% increase that the unions sought, but above the railroads’ 16% proposed wage hike. The unions and the railroads have been trying to reach a contract for more than two years and were $9 billion apart in their wage proposals, the PEB report noted.
The PEB asked the railroads and unions to continue negotiations over issues regarding engineer and conductor scheduling. If no agreement can be reached, the report recommends the matter be referred to binding arbitration.
“The Board hopes that this may prove to be a ‘win-win’ in which the Carriers obtain a more efficient and reliable system for manning the locomotives, with both operational benefits and cost savings, and employees will obtain preferred schedules with more control over their personal lives when not otherwise scheduled,” the report said.
After its appointment on July 18, the PEB was given 30 days to come up with recommendations. The publication of the report now triggers a second 30-day cooling off period between the railroads – including BNSF Railway, CSX Transportation, Kansas City Southern, Norfolk Southern, and Union Pacific – and the unions. During this period, no work stoppage or lockout can be ordered.
The PEB’s recommendations are not binding for either party. If the plan is rejected, the workers will be free to strike at the conclusion of the 30-day period, Bloomberg Law reported, but Congress can intervene by passing legislation to require the parties to extend talks, or to even force a resolution.
The Association of American Railroads (AAR), which represents major freight carriers, applauded the PEB report as a “useful basis to reach a resolution,” and said the industry was prepared to propose agreements based on the recommendations. “In the interests of all rail stakeholders, now is the time for railroads and their unions to reach a contract,” AAR President and CEO Ian Jefferies said in a statement.
The Transport Workers Union of America declined to comment on the recommendations. In a statement to Bloomberg Law, freight railroad Union Pacific, however, said “it is in the best interest of all stakeholders for the parties to reach agreements that provide our employees with well-deserved pay increases and prevent rail service disruptions.”