Update on National Labor Agreement
The nation’s largest freight railroads have been in national (multi-employer) bargaining with the rail unions since January 2010. The railroads have a ratified agreement with the largest union, the United Transportation Union (UTU), which represents about a third of the employees covered by this bargaining. Although the UTU agreement should have served as the pattern for settlements with the rest of the unions, the other unions have flatly rejected that agreement as a framework for voluntary agreements.
Labor negotiations in the rail and airline industries are governed by the Railway Labor Act (RLA), which bars strikes or other self-help until exhaustion of mandatory procedures.
Most national rail negotiations have resulted in voluntary, peaceful settlements; however, Congress has stepped in to prevent or terminate crippling strikes following the exhaustion of the RLA procedures. The last strike arising from national bargaining was in 1992; Congress acted immediately to end it. At that time, the Department of Transportation estimated that a nationwide rail strike would cost the U.S. economy at least $1.2 billion per day. That figure would, of course, be significantly higher today.
- The railroads were in mediation under the auspices of the National Mediation Board (NMB) with two coalitions representing the other rail unions. On Sept. 6, 2011, the NMB released the parties from mediation.
- Release from mediation triggered a 30-day cooling-off period, which will end Oct. 7, 2011. During this time, the parties cannot engage in self-help, such as a strike or lockout.
- The cooling-off period will be extended if President Obama appoints a Presidential Emergency Board (PEB) to investigate the dispute and recommend solutions. Given the significant impact railroads have on the economy, PEBs have almost always been appointed if the parties have not reached agreements during the 30-day period.
- The PEB’s appointment will extend the cooling off period for 60 more days. If agreements are not reached by that time, the RLA permits self-help by the parties.
We will closely monitor the situation and let you know when it would be helpful for you to contact Congress. Please contact your marketing representative if you have any questions.
Executive Vice President and Chief Marketing Officer