An emergency board established by President Joe Biden to help settle labor disputes between freight railroads and labor unions recommended increases in pay and benefits for rail workers in a report published Aug. 17.
In its report sent to the White House, the board recommended a 24 percent wage increase over a five-year term. Carriers had offered a 17 percent wage increase while labor unions had requested a 31.3 percent increase.
President Biden established the three-member Presidential Emergency Board (PEB) on July 15.
Lockouts/strikes are prohibited for 30 days following the release of the report, pushing the timing for a potential labor strike to Sept. 16. If rail carriers or rail labor reject the PEB recommendations, Congress can intervene, which it did in 1992 by creating a bill forbidding a lockout/strike.
The rail industry’s 12 labor unions, which represent 125,000 employees, and most Class I railroads began the bargaining process more than two years ago to amend unionized rail worker wages, benefits and work rules. In a July 1 letter to President Biden, NGFA and other shipper groups urged the administration to establish a PEB to “prevent catastrophic disruptions to the freight rail network.”
The board also recommended a 3 percent retroactive increase for 2020 and 3.5 percent for 2021, along with five $1,000 annual bonuses. The board recommended an increase in health benefits, an additional personal day each year and changes in how travel expenditures are reimbursed.
The board said it aimed “to act as honest brokers and to recommend terms for an agreement that are fair and reasonable.”
In a statement issued Aug. 17, Association of American Railroads (AAR) President and CEO Ian Jefferies said an agreement based on the board’s recommended terms would lead to the largest general wage increase in nearly 40 years.
“In the interests of all rail stakeholders, now is the time for railroads and their unions to reach a contract,” Jefferies said. “The industry is prepared to propose agreements based on the PEB’s recommendations to provide our employees with long overdue pay increases and avert rail service interruptions.”
Meanwhile, former Labor Secretary Seth Harris noted in a blog post earlier this week: “The best bet — but by no means a certainty — is that the parties will reach an agreement after the PEB issues its report.”
He noted that the PEB recognized that a significant contribution to poor rail service is too few workers moving large amounts of cargo. “Recruiting and retaining skilled workers in the coming months and years will depend heavily on the wages, benefits, and leave decisions codified in this collective bargaining agreement,” Harris wrote.