Freight railroads say strike can still be avoided

New York(CNN Business) The trade group representing the nation's freight railroads is confident that a strike by more than 100,000 union members can be avoided, even after rank-and-file members rejected the tentative labor deals reached earlier this fall.

So far three rail unions have rejected the proposed agreements and are set to go on strike as soon as Dec. 4. The two largest rail unions, which represent the conductors and engineers, are due to announce the results of their ratification votes on Monday. The nations' major freight railroads negotiate together on industrywide labor contracts with each of the 12 railroad unions.

If even one union goes on strike, the other 11 would honor the picket lines and spark an industrywide strike that would shut down an estimated 30% of the nation's freight movements, causing widespread disruptions to the nation's supply chain and economy.

But one of the primary voices for the management side of the industry, Ian Jefferies, CEO of industry the Association of American Railroads, the industry trade group, says he is confident the railroads can still reach new deals with any union whose members rejected previous proposals, and that the new contracts would be acceptable to membership.

He points out that the Machinists' union, one of the unions whose members initially rejected the deal, came back and ratified a slightly revised agreement, albeit with only 52% of members voting in favor.

"There's absolutely opportunities if a ratification fails the first time to sit down and come to additional agreements and put that out and get the [tentative agreement] ratified," Jefferies told CNN in an indepth interview Thursday. He said the "best outcome" for the industry is to reach agreements that can win ratification votes across all 12 unions.

But he added that if agreements can't be reached, the industry believes it can get quick, bi-partisan action by Congress to block or end a strike.

"I don't think it's anyone's goal to get Congress involved, but Congress has shown a willingness historically to intervene if necessary," said Jefferies. He pointed to comment by Labor Secretary Marty Walsh, who "made clear on CNN less than two weeks ago that Congress would need to intervene in his opinion if voluntary agreements weren't reached."

One of the biggest points of contention now is sick pay. While management said provisions in existing contracts allow workers to take time off when they are sick, the unions say there are too many restrictions and penalties for workers to take sick days that many other workers take for granted. And they often aren't paid when they can't come to work due to illness or injury.

The unions have argued they should be allowed to strike without Congressional action to block a walk-out or order them back to work. The best way to avoid a strike, they say, is to have the railroads agree to union demands for paid sick days.

"Congress should not have to intervene. The railroads should provide paid sick leave to its employees," said the Brotherhood of Maintenance of Way Employee Division in a statement earlier this month. That union, which represents track maintenance workers, is one of three unions whose members rejected the previous labor deals.

"They have the money to do it, and it literally would cost them a penny of every dollar of record profits to provide it," said BMWED. "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."

But Jefferies said the railroads are only willing to reach new deals with the unions which are within framework of recommendations made by a three-member panel, known as a Presidential Emergency Board or PEB, appointed by President Joe Biden in July to hear from the two sides and come up with a compromise agreement.

"Some of the unions did ask for additional sick days. And the PEB report very clearly and articulately laid out its analysis of their request and determined ... their request was not appropriate and it was explicitly rejected," Jefferies said.

Despite railroad management so far rejecting union demands for paid sick days, he said is possible to reach a deal that will satisfy both union membership and management. While he wouldn't discuss the details of proposals that might be acceptable to both sides, he said that a deal that is within the "framework" of the PEB recommendation "can take a lot of different faces."

Correction: An earlier version of this story's headline incorrectly described the Association of American Railroads. The industry group represents freight railroads.