The US House of Representatives on Nov. 30 passed legislation to force a tentative rail labor agreement ahead of a Dec. 9 strike that threatened to cripple the US economy. The bill then moved to the Senate, which approved the measure on Dec. 1, but without an expansion of paid sick days that had narrowly won support in the House.
The House bill passed on a 290-137 vote, and came just one day after President Joe Biden called on Congress to immediately approve legislation “without any modification or delay” that adopts the contract terms outlined by a Presidential Emergency Board (PEB) last summer and approved by labor and railroad negotiators in September.
This includes a 24% compounded wage increase over a five-year period from 2020 through 2024, immediate payouts averaging $11,000 upon ratification, and an extra paid day off. In a separate 221 to 207 vote, however, the House also approved a resolution to provide seven days of paid sick leave in the contract instead of one, which was a key disagreement that led to four of 12 unions voting against ratification.
The House resolution granting seven paid sick days was backed by nearly all House Democrats on Nov. 30, but only three Republicans. It prompted an angry statement from the Association of American Railroads (AAR), which had earlier applauded the Biden Administration for moving quickly to head off a strike.
“Now is not the time for Congress to put its thumb on the scale and selectively add to labor contracts, including agreements already ratified by employees, created through a multi-year process,” said AAR President and CEO Ian Jefferies. “It is in direct conflict with the President’s statement, and the Speaker and Congress must think of the long-term implications of such actions. A vote for terms above and beyond those recommended by the PEB, agreed to at the bargaining table, and ratified by a majority of the unions and voting employees, would upend the time-tested bargaining process in rail and other industries.”
In a Nov. 29 statement, Biden acknowledged his pro-union past and his hesitancy to force a binding agreement, but said the economic impact of a nationwide rail strike was too severe to allow the impasse to continue. A strike or lockout on Dec. 9 would cost the US economy an estimated $2 billion per day.
“As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement,” Biden said. “But in this case – where the economic impact of a shutdown would hurt millions of other working people and families – I believe Congress must use its powers to adopt this deal.”
Biden’s decision angered some union leaders. The Brotherhood of Maintenance of Way Employes (BMWED), one of the four unions whose members had rejected a proposed contract agreement with the railroads, said it was “deeply disappointed” in the president.
“A call to Congress to act immediately to pass legislation that adopts tentative agreements that exclude paid sick leave ignores the railroad workers’ concerns,” BMWED said in a Nov. 29 statement. “It both denies railroad workers their right to strike while also denying them of the benefit they would likely otherwise obtain if they were not denied their right to strike.”
The Senate on Dec. 1 took up three separate measures in its bill, ultimately approving by an 80-15 margin the contract that the Biden administration negotiated in September, without the additional paid sick days. A separate Senate measure to extend the Dec. 9 negotiation deadline by 60 days failed on a vote of 70-25, and an effort by Senate Democrats to add seven paid sick days was defeated in a 52-43 vote, failing to get the needed 60 votes to pass.
The bill now goes to President Biden, who was expected to sign quickly and not a moment too soon. Bloomberg reported on Nov. 30 that US railroads had already begun curtailing shipments of hazardous chemicals ahead of a potential nationwide strike. Some members of the American Fuel & Petrochemical Manufacturers (AFPM) were reportedly notified that shipments of hazardous products such as chlorine, ethylene oxide, and sulfuric acid were already winding down and any new shipments would be halted by the end of the week, according to Bloomberg.
The US Environmental Protection Agency (EPA) also warned that rail carriers could issue embargoes by the end of the week on chemicals needed for drinking water treatment, including anhydrous ammonia and phosphoric acid. Shipments of ethanol and diesel exhaust fluid were also imperiled, according to NATSO, which represents truck stops and travel plazas, and SIGMA, which represents fuel marketers and retailers.
In a Nov. 29 statement, The Fertilizer Institute (TFI) applauded the Biden Administration’s call for swift Congressional action to avert a Dec. 9 strike, and warned that rail shipments of ammonia and other fertilizer would stop moving on Dec. 4 if the threat of a strike persisted. “These embargoes could hamper production and add additional uncertainty to an already tight global market,” said TFI President and CEO Corey Rosenbusch.
In a Dec. 1 statement, Rosenbusch thanked Congress for its “swift work,” adding that the House and Senate votes prompted an “industry-wide sigh of relief” and an end to “months of uncertainty” for the fertilizer industry.
“TFI is also appreciative of the Biden Administration’s leadership as this challenging situation took bipartisan efforts on all sides and every level of our government to make it happen,” Rosenbusch added. “Rail is critical to the movement of fertilizer year-round. Averting embargoes and production delays were crucial to not only ensuring we’re able to provide the fertilizers our nation’s farmers need, but also avoiding additional disruptions to a global market already constrained by geopolitical events and volatile energy prices.”
A coalition of 449 organizations led by the U.S. Chamber of Commerce had warned congressional leadership in an open letter on Nov. 28 that disruptions to rail service caused by pre-strike embargoes were a “matter of grave urgency.”
“In September, the mere possibility of a rail service stoppage created significant disruptions to the timely delivery of critical goods and products,” the letter said. “The freight railroads must safely reduce operations and secure their customers’ goods days in advance of a potential strike, meaning businesses and communities saw interruptions in the delivery of fertilizers, chlorine and other products essential to clean water, our food supply and electricity generation.”
The Surface and Transportation Board (STB) has reportedly called Union Pacific (UP) management, including CEO Lance Fritz, to appear at a Dec. 13-14 hearing about the freight railroad’s escalating use of embargoes. According to STB data, UP’s use of embargoes to control congestion has increased from a total of five in 2017 to more than 1,000 to date in 2022. The agency said it has received numerous reports that the embargoes are hampering shippers’ operations and adding to supply chain problems.