As stakeholders in the freight rail industry closely monitor the progress of national collective bargaining between US Class I freight railroads and rail unions, a new development has introduced further uncertainty: The Brotherhood of Railroad Signalmen (BRS) has voted to reject a tentative agreement recently reached with rail carriers.
Imagine the bustling activity at a major rail hub, where signal lights flash continuously to control the movement of countless trains. These signal workers serve as the nervous system of the rail network, their work directly impacting the smooth operation of the entire supply chain. Now, this critical link shows signs of strain.
Negotiations Extended Without Immediate Service Disruption
The National Carriers' Conference Committee (NCCC), representing freight railroads in national collective bargaining, expressed disappointment with the outcome. "We're disappointed that the BRS failed to ratify the recent tentative agreement with the nation's freight railroads, which delays the benefits of the agreement for BRS-represented employees and further prolongs the resolution of negotiations with BRS," the NCCC stated. "The NCCC and BRS have agreed to maintain the status quo until early December. Therefore, this rejection does not create any immediate risk of a service interruption."
The NCCC noted that six rail unions have already ratified national agreements based on recommendations from the Presidential Emergency Board (PEB) appointed by President Biden to resolve ongoing labor disputes between Class I railroads and 12 rail unions. Tentative agreements with four other unions remain pending ratification. The BRS is one of two unions yet to approve agreements based on PEB recommendations, along with the Brotherhood of Maintenance of Way Employes Division (BMWED).
Details of the Proposed Agreement
The PEB recommendations issued on August 16 included a 24% wage increase over five years (2020-2024), with an immediate 14.1% wage hike and annual $1,000 lump sum payments throughout the contract term. The NCCC clarified that portions of these lump sum payments would be retroactive and disbursed immediately upon union ratification.
The BRS mailed 6,339 ballots to members, with 73.18% participation (4,639 voters). The results showed:
- 1,820 votes (39.23%) in favor of ratification
- 2,810 votes (60.57%) against ratification
- 9 votes (0.2%) invalid
Union Leadership Expresses Strong Discontent
"To my knowledge, this marks the first time BRS members have voted against ratifying a national agreement, and the participation rate represents the highest in BRS history," said BRS President Michael Baldwin. "I've consistently expressed disappointment with the NCCC's lack of good-faith bargaining and the role PEB 250 played in stripping BRS members of basic paid sick leave rights. Neither the NCCC nor PEB properly recognized the safety-sensitive, high-stress work BRS members perform daily to keep railroads moving and supply chains fluid. Without signal workers, road and rail crossings would become unsafe for the public—they bear this heavy responsibility every day."
Baldwin added, "Moreover, each carrier's top management and shareholders appear to have forgotten that their rank-and-file employees continued working daily throughout the unprecedented pandemic while executives worked from home to protect their families."
Industry Warns of Potential Economic Consequences
The Association of American Railroads (AAR) continues to emphasize the risks should negotiations with remaining unions fail to produce new labor agreements. These negotiations aim to address quality-of-life issues including historic wage increases and maintaining premium healthcare benefits. The AAR reiterated its support for both rail employees and the PEB recommendations.
Under the PEB framework, rail employees would maintain access to America's best healthcare plans, gain an additional personal leave day, and retain multiple leave options. For operating employees, agreements include enhanced leave scheduling capabilities and local agreements finalized after national ratification—measures designed to improve quality of life and schedule predictability.
"Rarely in modern US history has the freight rail industry received such national attention," said AAR President and CEO Ian Jefferies. "Observers should recognize fundamental facts: Rail jobs rank among the nation's most critical and receive fair compensation accordingly. Ratifying contracts shaped by the Biden administration and endorsed by labor leaders at the bargaining table will only enhance rail employment quality and benefits."
AAR executives noted satisfaction that PEB recommendations focused on leave-related concerns, highlighting industry leave programs that provide sickness benefits after four absent days, extendable up to 52 weeks.
Approval Process and Potential Outcomes
"Six of twelve unions ratifying shouldn't be overlooked," AAR Assistant Vice President of Public Affairs Ted Greener told industry media. "Their votes matter and confirm these are good agreements. Leadership clearly communicating these contracts' undeniable, historic gains to voting members can only help successfully conclude this bargaining round."
Regarding contingency planning for potential work stoppages, Greener emphasized current focus remains on ratification, though railroads maintain communication channels with customers and industry groups to ensure process awareness. "When September's strike threat loomed, communication intensified—and would again if needed," he said. "Collaboration proves crucial. Listening matters too. Railroads recognize leave policy concerns. That these agreements enable future local-level resolution of such issues remains important."
Industry analyst Tony Hatch of ABH Consulting suggested rail union leaders strongly desire agreement ratification. "If contracts fail, leadership appears ineffective—they want to retain their positions," Hatch observed. "Like elected officials, they must demonstrate value to constituents. Should a strike occur, just-in-time industries like automotive and steel could see cascading layoffs, though likely brief."
Hatch predicted any final agreement would closely mirror PEB recommendations, noting potential congressional intervention remains unlikely during an election year. "Some legislators might advocate intervention, but would Congress risk complex action potentially harming other workers and the economy? When unions reconsider votes, note this: Any strike would likely last mere hours. Labor's $2 billion daily economic loss estimates and AAR warnings serve primarily to ensure Congress does its job—which means essentially rubber-stamping PEB recommendations."