The threat of a freight railroad strike is back

New York(CNN Business) A union of railroad track maintenance workers has rejected a tentative agreement with the nation's freight carriers, renewing the threat that there could be a strike that shuts down this vital link in the nation's already struggling supply chain.

The vote, announced Monday by the Brotherhood of Maintenance of Way Employes Division, was 43% in favor of the proposed five-year contract, and 57% opposed.

"The lack of paid sick time off was the most cited and specific concern of membership. It was especially evident during the pandemic that it was a major problem," said a statement from the union on Tuesday. "The railroads have so far not addressed it in any meaningful way."

About 12,000 of the 23,000 members of the BMWE participated in the vote. It is the third largest of the major freight railroad unions. The two largest freight unions, which represent the more than 55,000 engineers and conductors who make up the two-person train crews, are conducting the their own rank-and-file ratification vote by mail.

The BWME said it will now enter negotiations with the association that represents management at the nation's major freight railroads in an effort to reach a new deal. Without a new deal there could be a strike, but not until at least Nov. 19, according to the union. Things will remain status quo with the union's contract until then.

A statement from the association negotiating on behalf of railroad management said it was "disappointed" with the vote, but given that the two sides had decided to maintain the status quo, "the failed ratification does not present a risk of an immediate service disruption."

But the two largest unions, the Sheet Metal, Air, Rail, Transportation union, which represents conductors, and the Brotherhood of Locomotive Engineers and Trainmen, which represents engineers, have yet to vote — throwing those outcomes into question.

"It's a toss-up," said a union source with one of the 'big two' unions.

The engineers and conductors union votes are cause for "apprehension on all sides," said the source. Online chatter among the conductors union and engineers union members signal they want a strike before even seeing the contract, while some are calling for reason, the source said. Conductors union and engineers union members will be mailed ballots later this month with a 21-day voting period. Results of those votes should be known in mid-November, just before the BMWE could be going on strike without a new deal.

The deals last month between railroads and unions were reached just hours before the deadline last month after a 20-hour marathon negotiating session.

"It could be a big letdown" if members reject the deal, said the source of all the time and work that went into reaching the deals.

Even if the members of the two larger unions vote in favor of their deals, they would not report to work if the BMWE were to go on strike. And the fact that the BMWE voted down the contract is probably a sign that rank-and-file anger towards railroad management could lead to no votes at the two larger unions as well.

"I think this is the canary in the coal mine for the engineers' and conductors' votes," said Todd Vachon, professor of labor studies at Rutgers University. "They were the ones you anticipate would reject a deal. The fact that the BMWE voted no suggests a no vote [by train crew members] is more likely."

The tentative labor deals were reached on Sept. 15 following a marathon 20-hour bargaining session that included direct intervention from President Joe Biden and Labor Secretary Marty Walsh. The new contracts include an immediate 14% raise with back pay dating to 2020, and raises totaling 24% during the five-year life of the contract that runs from 2020 through 2024. They also gives union members cash bonuses of $1,000 a year. All told, the backpay and bonuses will give union members an average payment of $11,000 per worker once the deal is ratified.

But the deals were difficult to reach not because of the financial terms, but because of work rules that unions said had brought engineers and conductors to a breaking point. Staffing shortages had required crew members to be on call seven days a week, ready to report to work at short notice. And union leadership said those rules, which were adjusted as part of the contract, had caused great anger at management among rank-and-file members.

Despite that discord, the unions' leadership expressed confidence that their members would ratify the deals, even if they didn't get everything they wanted at the bargaining table.

"I think we got everything we could," Dennis Pierce, president of the engineers union, told CNN on the day the deal was reached. "And I think once our membership understands where we sit and what's in it, I think it'll ratify."

Numerous smaller unions have already approved their deals. The only group that initially rejected it, the Machinist union which represents about 5,000 mechanics for locomotives and track equipment and facility maintenance personnel, has subsequently reached a new tentative agreement without a strike. The Machinists' rank and file is again considering that deal.

The Biden administration was desperate to avoid a rail strike because of fears it would upend already strained supply chains. The major railroads carry 30% of the nation's freight when measured by weight and distance traveled, and a strike could have caused shortages and higher prices for such essentials as food and gasoline, forced factories without parts to close down and left store shelves empty during the holiday shopping period. The only potential good news for the Biden administration is that if there is a strike, it would now take place after the midterm elections.

Rank and file union member anger hasn't just been expressed at railroads. Union members working in other industries have recently balked at approving deals, even when recommended by their unions' leadership. Although most union contracts are ratified, there have been some very high-profile examples of angry union members voting no.

About 10,000 members of the United Auto Workers at farm equipment maker John Deere (DE)went on strike last fall after rejecting a tentative agreement. That rejected offer included immediate raises in their base pay of 5% to 6%, and additional wage increases later in the contract that could have increased average pay by about 20% over the six years. And it had a cost-of-living adjustment that would give them additional pay based up future inflation.

But more than 90% of the UAW members at Deere voted no and went on strike, and then stayed on strike after rejecting a subsequent deal. They finally returned to work after five weeks after a third vote on a similar package passed.

Striking workers at cereal maker Kellogg (K)also rejected a tentative deal and decided to stay on strike in December before finally agreeing to a deal weeks later.

And only 50.3% of film production workers voted in favor of a deal last fall that achieved virtually all the bargaining goals of their union, a contract that averted a strike by 63,000 technicians, artisans and craftspeople which could have brought production of movies, television and streaming shows to a halt.