Rail deal awaits workers' sign-off as strike fears wane

As the White House on Thursday celebrated a tentative agreement to avert a nationwide rail strike that could have devastated the economy, union officials cautioned that not everything is signed, sealed and delivered.

Most crucial in the days ahead: Workers across a dozen unions need to vote to ratify the compromise.

"There's going to be a lot of work to do after today," AFL-CIO Transportation Trades Department President Greg Regan said. "This was a big breakthrough, and we can take a day to reflect on it." Yet "I don't want to kid anybody here."

It may not be an easy sell, especially for the members of the unions that had earlier opposed the recommendations of a White House-appointed emergency board.

Emboldened by a historically tight labor market and an unusually high union approval rate, many workers had already been making plans Wednesday to picket — and could have some qualms about agreeing to a deal that doesn't deliver everything they initially sought.

Thursday's agreement "doesn't mean our employees didn't want to strike, because they're angry," said Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen, one of the holdouts on the emergency board's recommendations. "Our job now is to go out and explain to them what we were able to accomplish that can help improve their lives."

Nonetheless, the tentative deal — which emerged from 20-plus hours of negotiating — was a major political win for President Joe Biden, whose administration facilitated the labor-management talks, and good news for an economy that has seen little of that lately.

Speaking Thursday from the Rose Garden, Biden called the tentative agreement a "validation" of his belief that unions and employers can work together "for the benefit of everyone."

"This agreement can overt a significant damage that any shutdown would have brought. Our nation’s rail system is the backbone of our supply chain,” he said, flanked by Labor Secretary Marty Walsh and other top economic aides.

An agreement to hold off a strike had been set to expire at 12:01 a.m. Friday, but the tentative deal pushes off the deadline for several more weeks as union leaders work toward ratification by members. Those votes will wrap between Sept. 28 and mid-October.

Should they reject the compromise, it won't automatically lead to a strike. Rather, it would bring parties back to the table to negotiate another agreement.

Thursday's new deal includes wage hikes, freezes in health care costs and changes in work rules. One notable breakthrough: a shift in the railroads' time-off policies, which had been a major obstacle to a deal.

"Morale was at an all-time low with the attendance policies," SMART Transportation Department President Jeremy Ferguson said. "We had a mess on our hands. So I think we accomplished a lot to turn that around."

The Association of American Railroads, the trade group for the largest freight carriers, said in a statement: “These new contracts provide rail employees a 24 percent wage increase during the five-year period from 2020 through 2024, including an immediate payout on average of $11,000 upon ratification, following the recommendations of Presidential Emergency Board."

Negotiators had spent more than 20 hours at the Labor Department under the watchful eye of Walsh, a former union president, arriving shortly after 9 a.m. Wednesday and departing pre-dawn on Thursday.

A White House official said that around 2 a.m. Thursday, Walsh relayed that the parties were on the brink of a deal, and a public announcement from DOL arrived around 5 a.m.

Biden also credited Agriculture Secretary Tom Vilsack and Transportation Secretary Pete Buttigieg for their work in the final stretch of negotiations.

Buttigieg told POLITICO that in the 24 hours before a resolution, he made “more phone calls than I can count, directly engaging the players,” and that “as the evening wore on, it became clearer that the parties gathered at the Department of Labor were really circling around a couple of key issues.”

But he said the power of the president's engagement was an influential factor.

"It’s one thing for everybody to know this is important; it’s another for the president to call and ask, in the name of the country and the economy, that everyone there do everything in their power to get this thing landed,” Buttigieg added.

In a 9 p.m. call to Walsh and negotiators at the table, Biden pushed them to recognize the harm that a strike would bring by hitting families, farmers and businesses. “The economic impacts could have been significant,” a White House official said.

It’s a close call for the nation’s economy and — should workers vote to ratify — a major win for a Biden White House that would have been hard-hit by the likely disastrous fallout. Major industry groups exhaled in relief Thursday after word of a deal arrived, while being mindful that it is not yet finalized.

“Our supply chain is entirely interdependent, making the potential for a nationwide rail stoppage a serious threat to our nation’s economic and national security,” American Trucking Associations President Chris Spear said in a statement. “We applaud both sides for reaching a tentative agreement that averts this outcome and permits our supply chain to continue climbing out of this COVID-induced rut.”

Preemptive impacts from the potential strike had begun to pile up in the days leading to the agreement. Amtrak said Wednesday it would cancel all long-distance trains Thursday and said service in several states would follow suit that night, and commuter rail lines in cities like Chicago announced plans to potentially suspend service Friday.

Amtrak quickly pivoted to try and restore some of those canceled trips in the hours after the tentative deal was publicly announced and a spokesperson for the Chicago area system said operations will not be affected after all.

"We were able to get their promise that services will operate and we expect normal operations," Metra spokesperson Meg Thomas-Reile said of the freight companies that own the tracks.

Industry groups had halted shipments of grain, including corn and soy, and carriers sidelined hazardous and security-sensitive deliveries. The U.S. Transportation Command, the military’s cargo and logistics arm, said it was prioritizing aid to Ukraine and overseas deployments in order to mitigate any impact from a strike.

Any work stoppage would potentially touch on every facet of American life. That includes grocery shortages, starving livestock, coal-less power plants and more, dealing a potentially enormous economic blow just as inflation starts to moderate. With midterm elections next month, any further harm to commerce could have serious political ramifications for Democrats.

Christopher Cadelago, and Alex Daugherty contributed to this report.