Labor Secretary says Congress needs to block rail strikes without new deals

New York(CNN Business) Labor Secretary Marty Walsh says he hopes negotiators between railroads and some rail unions can reach new labor deals and avert a possible strike. But he said without a deal he expects Congress will step in and impose contracts on the unhappy rank-and-file union members.

The statement is a blow to the unions' leverage as they seek to win a contract that their membership will accept.

Two rail unions reached tentative labor deals with the railroads in September, ahead of a strike deadline, only to have their membership vote against ratifying them.

"My goal is to get those two unions back at the table with companies and get this thing done," Walsh told CNN Friday. He said a negotiated agreement would be "the best thing we can do is avoid any type of rail strike or slowdown."

Walsh was involved in a 20-hour bargaining session that reached tentative labor deals just hours before a September 16 strike deadline. He said failing new negotiated agreements, Congress would have to impose a contract on the unions, as a way to keep union members on the job.

If "for some reason [one of the unions] doesn't get to an agreement with the companies then ... Congress will have to take action to avert a strike in our country," he said.

One of those two unions - track maintenance workers who belong to the Brotherhood of Maintenance of Way Employes Division, is set to go on strike as soon as Nov. 19 without a new deal, while the other, the Brotherhood of Railroad Signalmen, could walk out as soon as Dec. 4. The BMWED members voted 57% against the proposed deal, while members of the Signalmen union voted 60% against the deals.

If any rail unions were to go on strike all the rail unions -- which together represent about 110,000 members -- would honor their picket lines and refuse to work, bringing the nation's freight railroads to a grinding halt. That would be a body blow to the US economy, snarling still-struggling supply chains and triggering widespread bottlenecks and shortages.

About 30% of US freight, when measured by weight and distance traveled, moves by rail. Prices of goods from gasoline to food to cars could soar if trains halt. In addition, factories could be forced to shut temporarily due to parts shortages. Goods that consumers want to buy during the holiday season could be missing from store shelves.

Walsh's statement, while unwelcome, was no suprise to Michael Baldwin, president of the Signalmen union. Many business groups were urging Congress to act before the Sept. 16 strike deadline, and two Republican senators, Roger Wicker of Mississippi and Richard Burr of North Carolina, had introduced legislation that would have imposed a contract on the unions.
"Republicans were prepared to pass something then,"Baldwin said. "They have that ability."

But at that time Democrats refused to act to block a potential strike. Sen. Richard Durbin, the second highest ranking Democrat in the Senate, told CNN at that time that "I don't think it's likely we will intervene." He said that avoiding a strike "depends on the parties in negotiations stepping up to the plate."

The Association of American Railroads said it is counting on Congress to act if new deals can't be reached.

"No one wants a strike to happen, and everything we've done throughout this process has been focused on getting a deal done and avoiding even the threat of one," said the group's statement. "Should we be unable to reach ratified agreements, however, Congress has historically stepped in to avert a service interruption."

Three unions have yet to finish their own ratification votes, including the two largest, which represent the engineers and conductors who make-up the two person crews on each train.

Results of the most recent vote, by a 5,000-member unit of the machinists union that represents locomotive mechanics and maintenance workers, were announced Saturday: it passed with only 52% of the vote. Such a narrow margin is another sign of the widespread anger among rank-and-file rail workers with the current labor agreements.

The unions want the ability to go strike, believing that will put pressure on railroad management to negotiate. The threat that Congress could act to impose a contract takes away much of the leverage that the unions need to reach an agreement.

The deals that have been rejected are lucrative ones: They include an immediate 14% raise with back pay dating to 2020 and pay raises totaling 24% during the four-year life of the contracts, which run from 2020 through 2024. They also give 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 pay was never the main sticking point in these negotiations. The main issue that led the rank-and-file of the BMWED and Signalmen is the lack of paid sickdays in the rejected tentative labor agreements. Railroad management has already rejected BMWED's request to add sick days to the next tentative agreement in order to get a deal membership would ratify.

Unions have historically agreed to contracts without traditional paid sick days in return for higher pay for the days they do work. Workers who need only a day or two off when they are sick are expected to make up the time with other work days or lose pay. And there is pay for longer term medical leave. While six of the other unions have agreed to the tentative deals without paid sick days, these two unions have voted against it

In response to Walsh's comment, the BMWED said it does not want or need Congress to step in.

"Congress should not have to intervene. The railroads should provide paid sick leave to its employees," its statement said. "They have the money to do it, and it literally would cost them a penny of every dollar of record profits to provide it. It's only 2% of what CSX, NS and UP spent so far this year in stock buybacks. It's literally nothing to them, yet they refuse to provide it."

Congress would be free to impose any contract it wants on the unions and railroads, including one which includes terms that the unions might want, or one that would be far less attractive than what their membership have already rejected.

Whatever action that Congress takes would require a level of bipartisanship. Even if Republicans win control of one or both houses of Congress in next week's midterm elections, the Congress that meets in November and December would be a so-called "Lame Duck Congress" made up of current members, not newly elected members, so Democrats would still be in control.

Baldwin said the Signalmen and railroad management held a virtual negotiating session this week and are set to meet in person next week.

"The parties are attempting to resolve the issue, that's the best outcome," he said.

-- CNN's Vanessa Yurkevich contributed to this report