Railroad strike averted after marathon talks reach tentative deal

Unions and management reached a tentative deal early Thursday that averts a freight railroad strike that had threatened to cripple US supply chains and push prices higher for many goods.

The deal with unions representing more than 50,000 engineers and conductors was announced just after 5 a.m. ET in a statement from the White House, which called it “an important win for our economy and the American people.”

It came after 20 hours of talks between the unions’ leadership and the railroads’ labor negotiators hosted by Labor Secretary Marty Walsh. They began their meeting Wednesday morning with the clock ticking down to a strike that had been set to start at 12:01 am ET on Friday.

The agreement does not mean the threat of a strike has gone away entirely. The deal needs to be ratified by union members. But it’s good news for a wide range of businesses that depend upon the freight railroads to continue to operate, and for the wider US economy. About 30% of the nation’s freight moves by rail.

Few details of the deal have so far been made public. But the statement from President Joe Biden indicated that the major issue that had brought the country within a day of its first national rail strike in 30 years had been addressed in the unions’ favor.

“It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years,” said Biden’s statement. “These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned.”

The dispute was about staffing shortages and scheduling rules that union leaders said had brought their membership to a breaking point. The unions say the railroads have been requiring their members to be “on call” and ready to report to work on short notice as often as seven days a week. Leadership of the two unions had said their members would not accept a contract without changes to those work rules.

Biden described the deal as “also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

It is an important victory for Biden, who faced nothing but bad choices if a deal had not been reached. Backing Congressional action sought by the business community to impose a contract on workers would have angered his supporters among the unions. Letting the work stoppage play out risked massive economic consequences just ahead of the midterm elections.

Railroad workers are governed by a different labor law than most workers, one that limits their freedom to strike and allows for more governmental intervention. In July, Biden issued an order that prevented a strike at that time and created a panel, known as a Presidential Emergency Board, to try to find a solution to the dispute.

It also imposed a 60-day cooling off period during which the unions could not strike and management could not lock out workers. That cooling off period was due to end early Friday.