Biggest US rail union rejects labor deal, sparking holiday strike concerns

Members of the largest US rail workers union rejected a proposed deal on Monday – a move that sparked concerns of a potential strike just ahead of the busy holiday season.

Train conductors represented by the Sheet Metal, Air, Rail and Transportation Workers-Transportation Division, or SMART-TD, narrowly rejected the proposed deal. The vote drew record turnout among the union’s membership of more than 28,000 conductors and other workers.

“SMART-TD members with their votes have spoken, it’s now back to the bargaining table for our operating craft members,” SMART-TD President Jeremy Ferguson said in a statement on the decision. “This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers and the American people.”

“The ball is now in the railroads’ court. Let’s see what they do. They can settle this at the bargaining table,” Ferguson added. “But, the railroad executives who constantly complain about government interference and regularly bad-mouth regulators and Congress now want Congress to do the bargaining for them.”

Elsewhere, the second-largest rail union, the Brotherhood of Locomotive Engineers and Trainmen, or BLET, voted to approve the deal. Collectively, the two unions represent about half the unionized workforce on freight rails nationwide.

SMART-TD is one of four freight rail unions that have shot down a White House-brokered labor deal, while eight other unions have approved it.

Due to a preexisting agreement to honor respective picket lines, all 12 unions must sign off on the deal to prevent a strike before the current status quo agreement expires on Dec. 8.

The rail industry’s labor unions are pushing for more lenient attendance policies and upgraded sick leave policies to ease pressure on workers. Rail companies argue expanded policies would force them to bring on more staffers.

A special board of arbitrators appointed by President Biden outlined the proposed five-year deal, which includes 24% pay raises and a $5,000 bonus for workers.  

A nationwide rail workers strike could cost the US economy more than $2 billion in lost output per day, according to a September analysis by the Association of American Railroads.  

A strike would impact holiday travel and snarl supply chains across various industries, from manufacturing to retail, ahead of the winter holidays. Further supply chain difficulties could exacerbate inflation, which had showed signs of easing in October.

The Retail Industry Leaders Association said a rail strike “would cause enormous disruption to the flow of goods nationwide” during the holiday shopping season.

“Fortunately, this year’s holiday gifts have already landed on store shelves. But an interruption to rail transportation does pose a significant challenge to getting items like perishable food products and e-commerce shipments delivered on time, and it will undoubtedly add to the inflationary pressures already hitting the U.S. economy,” said Jess Dankert, RILA’s vice president of supply chain.

The Associated Press contributed to this report.