America faces a possible rail strike in two weeks after largest union rejects labor deal

New York(CNN Business) America faces a growing risk of a crippling national freight rail strike in two weeks. The rank-and-file members of the nation's largest rail union, which represents the industry's conductors, rejected a tentative labor deal with freight railroads, the union announced Monday.

The nation's second-largest rail union, which represents engineers, ratified its own contract. But the failure of the conductors to ratify their deal is another setback to efforts to avoid a strike.

With these votes, all 12 rail unions have now completed their ratification process, with members of eight of the unions voting in favor of deals and four voting against it. The four unions that have voted no will remain on the job until at least early next month while negotiations are held to try to avoid a strike that could cause widespread disruptions in the nation's still struggling supply chain and overall economy.

If even one of the dozen railroad unions were to go on strike, the other 11 would honor the picket lines, shutting down the railroads.

If a strike goes on for an extended period, it could cause shortages and higher prices for goods including fuel and food. If the four unions that rejected the deals are unable to reach new deals before strike deadlines, Congress could order the railroad workers to remain on the job or return to work.

The two unions that released voting results Monday are the transportation division of the Sheet Metal, Air, Rail, Transportation union (SMART-TD), which represents about 28,000 conductors and the Brotherhood of Locomotive Engineers and Trainmen (BLET), which represents about 24,000 engineers. The engineers and conductors make up the two-person train crews.

Both unions reached tentative deals in September in a marathon 20-hour negotiating session just hours before their earlier strike deadlines.

President Joe Biden called those deals "a win for tens of thousands of rail workers and for their dignity and the dignity of their work." He had directly intervened in the final round of talks, but his praise of the deals wasn't enough to win approval from rank-and-file members of the conductors' union.

The deals nearly got the support they needed to be ratified by both unions. One was ratified by the engineers, with 53.5% voting yes, while the other was a very slim defeat by the conductors with either a small majority or a near majority voting for ratification.

The conductors' vote ultimately failed because the union's rules require each of five classes of workers within the union to approve the deal for it to pass.

Although 64.5% of "yardmasters," which includes 1,300 of the union's membership, supported the deal, 50.87% members of train and engine service members of the union voted against ratification. The union did not release the overall vote totals for SMART-TD members.

The no vote follow similar contract rejections by the rank-and-file members of three other rail unions -- one representing track maintenance workers, another whose members maintain and operate the signal system, and a third who represent locomotive mechanics and welders.

The Association of American Railroads, the industry trade group, told CNN last week that the railroads are still hopeful of reaching new deals that can be ratified by membership without a strike taking place. It repeated that hope Monday after the latest vote.

"While railroads remain committed to reaching agreements with these remaining unions, the timeline for those to occur is short," said the AAR's statement.

One of those unions which earlier rejected its deal, the Brotherhood of Maintenance of Way Employes Division (BMWED), announced Monday it was moving its strike date back to Dec. 9, to be in sync with the strike date for the conductors and one of the other unions.

And it suggested all four unions should negotiate together ahead of a common Dec. 9 strike date.

The one union that might go on strike before Dec. 9, the Brotherhood of Railroad Signalmen [BRS], could go on strike at 12:01 am ET on Dec. 5. Last week the BRS President Michael Baldwin told CNN the union did not intend to push back its strike deadline "at this time."

Lucrative deals get rejected

Even within many of the unions that voted in favor of the deals, there was significant opposition, as was shown in the 46.5% of engineers who voted no.

The deals being voted down are lucrative for union members. They include an immediate 14% raise with back pay dating to 2020, as well as pay raises totaling 24% during the four-year life of the contracts, which run through 2024. Union members also would receive 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 it's not the pay that has been the sticking point in the negotiations. It's the work rules and quality of life issues, such as staffing levels and paid sick time, which the tentative agreements do not include.

So far railroad management has rejected proposals from union negotiators to add sick pay as a way to win ratification from the rank and file.

Congressional action possible

Congress is already facing calls from a wide range of business groups to act to prevent a strike. About 30% of the nation's freight moves by rail, when measured by the weight of the freight and the distance it travels.

The AAR joined those calls for Congressional action if new deals can't be reached.

"Congress has historically intervened to prevent rail system disruptions. In the event that the four unions remain unwilling to enter agreements ... Congress must be prepared to act and institute the terms supported by the majority of the unions, guaranteeing certainty for rail customers and the broader economy," it said in its statement.

Labor Secretary Marty Walsh, who was involved in the negotiations that reached the deals that averted a strike back in September, told CNN earlier this month that while he prefers to reach a new round of negotiated agreements, it would be necessary for Congress to act to prevent a strike.

The White House said Monday they are looking to labor and industry parties involved in negotiations to resolve a rail dispute on their own ahead of a critical December deadline.

"As the President has said from the beginning, a shutdown is unacceptable because of the harm it would inflict on jobs, families, farms, businesses and communities across the country," a White House official told CNN.

The official added: "A majority of unions have voted to ratify the tentative agreement, and the best option is still for the parties to resolve this themselves."

Asked Monday by CNN's Jeremy Diamond what he was doing to avert a rail strike, President Biden responded, "We're going to be talking about that today."

But unlike July, when Biden was able to block the unions from going on strike by naming a panel to try to come up with a solution both sides could live with, it now rests with Congress, not Biden, to act if new labor deals can not be reached.

The unions are all opposed to Congressional intervention and want to be allowed to strike to raise pressure on the railroads to achieve their bargaining goals, though they would not be opposed to the Labor Department once again facilitating negotiations.

"We don't think it should require the influence or cajoling of any outside party to get the railroads to be reasonable on behalf of their business or workers," said the BMWED in a statement. "But it would be helpful for these third parties to start to facilitate the discussion. It's clear railroads won't engaged with us meaningfully unless they are forced to.

An added challenge: it would take bipartisan cooperation in the "Lame Duck" session of congress to pass legislation that will prevent or quickly end a strike.

-- CNN's Betsy Klein and Jeremy Diamond contributed to this report