CONGRESSWOMAN ELISE STEFANIK
On Friday, December 2, 2011, the House is scheduled to consider H.J. Res. 91, a bill to provide for the resolution of the outstanding issues in the current railway labor-management dispute, under a suspension of the rules requiring a two-thirds majority for approval. H.J .Res. 91 was introduced by Rep. John Mica (R-FL) on November 30, 2011, and was referred to the House Committee on Transportation and Infrastructure.
H.J. Res. 91 would provide for a resolution of the current dispute between railway labor and management and prevent an interruption to interstate commerce by implementing the Presidential Emergency Board’s (PEB) recommendations, preserving the conditions as they exist, and binding the parties to the agreement through December 31, 2014. Under the bill, the recommendations of the PEB would be binding on all included parties and would have the same effect as though it was agreed on by all parties. The recommendations of President Obama’s PEB have already been agreed to by 11 of the 13 labor organizations representing the nation’s railroad workers.
According to the House Committee on Transportation and Infrastructure, as of this week, the nation’s largest freight railroads had reached settlements with more than 60 percent of their workforce (11 of 13 unions) based on an agreement originally reached with their largest union, United Transportation Union (UTU) in September. UTU represents approximately 1/3 of the total railway workforce. The Presidential Emergency Board (PEB) recommendations reflect the terms of the agreement and would provide that Union members will now pay for some of their health care costs, including annual deductibles of $200 for individuals and $400 families, as well as additional copayments for emergency room visits. In exchange for these concessions on their health care contributions, they receive an 18.6 percent salary increase over 6 years and a one-time lump sum payment of 1 percent of their salary.
Collective bargaining between the railroad operators (e.g. BNSF, Norfolk Southern, Union Pacific) and the major labor organizations representing railroad employees is governed by the 1926 Railroad Labor Act (RLA). Agreements between the National Carriers’ Conference Committee (NCCC), the employers’ representative, and the national representatives of the unions remain in force until the parties agree to changes, subject to a multi-step statutory HprocessH, including compulsory mediation. Neither side can engage in “self-help”—a labor strike or a unilateral implementation of management terms—until all steps have been exhausted. The current round of negotiations is perilously near to that point at a time when the nation’s economy cannot withstand a service disruption.
According to the Association of American Railroads, the nation’s largest railroads have reached voluntary settlement agreements with 11 unions covering more than 60 percent of the 132,000 rail employees in national bargaining that began in January 2010. Two of the unions ratified agreements in September 2011, with tentative agreements reached by eight additional unions earlier this month following recommendations made by the neutral PEB, as required by the RLA, appointed by President Obama. The mandated 30-day “cooling off” period intended to extend negotiations, during which the parties can accept or reject the PEB recommendations or reach an independent agreement, is set to expire 11:59pm on December 5th.
The PEB recommendations reflect the terms of the agreement and include concessions that union members will now pay for some of their healthcare costs. In exchange for these contributions, they will receive an 18.6 percent salary increase over six years and a one-time lump sum payment of 1 percent of their salary.
On November 23rd, the railroads joined a proposal by the Brother of Maintenance of Way Employees (one of the holdout unions) to extend the negotiation period to 12:01am on February 8, 2012, to allow for resolution agreeable to all parties. The railroads’ proposed extension set November 29th as the deadline to agreement contingent on both of the remaining unions’ accession to the February 8, 2012 objective. Absent this extension, the unions and the railroads are free under the RLA to exercise “self-help” on December 6th, when the threat of a work stoppage will be imminent. If one of the remaining unions were to strike, the other unions would respect that strike, effectively shutting down the nation’s entire rail system and dealing a catastrophic blow to our nation’s already ailing economy.
Over the last 85 years, most negotiations under RLA have resulted in voluntary, peaceful settlements. However, Congress has stepped in to prevent or terminate crippling strikes following exhaustion of RLA procedures. Past Congressional actions have included additional “cooling off” periods to continue negotiations, mandated implementation of PEB recommendations, or binding arbitration. With the possibility that a national rail strike could cost the economy 5 percent of daily GDP every day that it continues—an impact on the scale of the most recent recession—the country can ill afford such a negative economic shock. A. Kenneth Gradia, Chairman of the NCCC, said, “It is critical to the national interest to make every reasonable effort to avoid the threatened service disruption during the busy holiday shipping season and potentially cost the U.S. economy $2 billion a day.”
A Congressional Budget Office (CBO) estimate of the legislation was not available as of press time.