CSX President and CEO Joe Hinrichs got the wheels turning in late August when his railroad took labor negotiations out of national handling through the National Carriers Conference Committee (NCCC) and, well ahead of Nov. 1 Section 6 notices, entered into tentative agreements with 12 unions. Norfolk Southern and BNSF soon followed CSX—moves about which I have been told these two railroads have serious concerns. Capitol Hill Contributing Editor Frank N. Wilner comments on what could occur—mostly on potential unintended consequences— a little later.
This is the first time since 1963, when John F. Kennedy was President, that several railroads have moved away from national bargaining. The wheels are now turning through uncharted territory. Are they wheels of progress, driving a well-balanced train consist with an optimized horsepower per ton ratio that will deliver premium goods for the good of all, or a runaway freight train? Opinions widely vary.
Revealing, perhaps even instructive, are SMART-TD President Jeremy Ferguson’s acknowledgments that two-person crew mandates may not survive, and that Joe Hinrichs grabbed the baton from the NCCC and set out to negotiate a CSX-specific agreement, offering up more than the NCCC’s other railroads were willing. Here’s what Ferguson had to say in a recent letter to his members:
“Undoubtedly, this scenario is a bit unusual to those of us who have been around for a decade or more, and it is even more unconventional to us as international officers who are usually engaged in national negotiations every three to five years,” Ferguson wrote. “We are definitely in some uncharted waters here, because we have never seen a tentative agreement come to fruition before our Section 6 notices were even served, or the existing agreement’s moratorium has opened to require negotiations under the Railway Labor Act (RLA).
“In the last round of negotiations, we were met with some of the most contentious circumstances imaginable, due to all the carriers being hell bent on achieving crew consist changes to remove conductors from through freight trains. Throughout that round of bargaining, not a single rail labor union was able to gain any meaningful traction, as the carriers made it very clear they were not negotiating with anyone until SMART-TD conceded to eliminating a significant portion of the conductor craft. Of course, we never agreed and instead made our case to Presidential Emergency Board 250, which reaffirmed that all crew consist issues were to be handled at the General Committee of Adjustment level. PEB 250 also gave us the largest pay increase in modern history, along with some very complex work rule changes to include rest days, and the reinstatement of the 15% monthly health and welfare contribution requirement.”
Ferguson went on to spell out several aspects of the tentative agreements as they apply to SMART-TD, which I’ve edited just a tad:
“The proposed general wage increases work out to be within $2.00 per day compared to what we received under PEB 250. Even though 17.5% is objectively less than 22%, we are compounding upon a higher dollar value today than we were under PEB 250. By July 1, 2029, the base foreman rate of pay will increase by $61.40 per day and the base conductor rate of pay will increase by $55.28 per day. Under the record 22% of PEB 250, our foremen experienced a $63.36 per day increase, and our conductors experienced a $56.53 per day increase. This proposal is the largest general wage increase negotiated voluntarily without third party intervention, without healthcare cost increases, and without work rule changes.
“Since there are no work rule changes affecting crew consist, these agreements (if ratified) will secure another five-year period where no changes can even be proposed under Section 6 of the RLA. We have obtained a two-person crew regulation from the Federal Railroad Administration, but we are still very concerned about the possibility of future anti-labor and anti-regulation focused Administrations undermining our progress. We are equally concerned with what the Supreme Court has done with their recent Chevron decision, which could also compromise our regulation. Ratifying these agreements now will protect and guarantee the future of our conductors, while providing another five years for us to focus on passing a rail safety bill through Congress, which would make two-person crews the literal law of the land.
“[SMART-TD members] with fewer than 25 years of service will be getting [their] next week(s) of vacation entitlement two years sooner. [They] will see much needed and commonly requested increases to your dental, orthodontic and vision benefits, and vasectomies will be covered by medical insurance. Additionally, if [they] are single, [they] will have the option to choose a health a welfare plan with a lower monthly contribution requirement of 10%, compared to the 15% we are all currently paying. This voluntary option is worth approximately $100 per month for those who qualify and decide to opt in. For those who opt completely out of coverage, the payment made will double, from $100 to $200 per month.
“General Chairmen are signatory to this agreement, not SMART-TD International officers, [because] leading up to this tentative agreement, there were some informal discussions at the ‘national’ level between some of the involved rail labor unions and the NCCC. Those discussions were not productive. However, Joe Hinrichs from CSX said he would make a deal for most of what had been discussed but rejected by the NCCC. As a result, these agreements now must be done ‘on the property’ at the individual General Committee level. NS and BNSF management also agreed to the same deals shortly after the CSX. It’s a proposal that should bring labor peace instead of the high-profile confrontations of just a few years ago. No hidden agendas, no waiting for two-plus years, no backpay hanging in the balance, and no nonsense.”
Railway Age Capitol Hill Contributing Editor Frank N. Wilner, author of “Understanding the Railway Labor Act” and “Railroads & Economic Regulation” and a former labor official (SMART-TD predecessor UTU), talks about the potential unintended consequences:
“The individual agreements being negotiated on-property, such as by General Committees of SMART-TD, mark the first time in more than 60 years that rail labor’s craft unions and Class I railroads have collectively bargained wage, benefits and work rules agreements outside of national handling. Since 1963, railroads have negotiated through the NCCC—and even before that through Eastern, Southern and Western conference committees that similarly represented carriers in regional (but nationally coordinated) handling.
“To be seen is how many of the unions’ fragmented General Committees gain membership ratification of the deals they are negotiating outside of national handling. Absolute chaos could result if, for example, half of BNSF has a ratified agreement with some unions and the other half does not, or if CSX has ratified agreements with all its unions while Norfolk Southern has only some or none. We could be faced with a wave of individual railroad strike threats, creation of multiple Presidential Emergency Boards and even strikes on portions of a railroad. Avoiding even the threat of such chaos is the rationale behind national handling.
“If, in fact, Joe Hinrichs, as SMART-TD says, is the change agent breaking away from national handling, recognize his background is in the auto industry, where rather than 12 craft unions, the three major auto manufacturers deal with a single United Auto Workers union representing multiple crafts and under a different law than the RLA.
“Carriers eventually may face having to lockout nationally to tame this chaos, gain some degree of order through a single or limited number of PEBs, and/or beg Congress for legislative assistance. What is happening is uncharted territory.
“Then there is Nov. 1, when unions and carriers, through the NCCC, are scheduled to exchange desired contract amendments to the existing national agreement—the process in place since 1963. This will occur under the shadow of some individual property—or even partial individual property—member-ratified agreements. With only some individual-property—or partial individual-property—agreements in place, the question is, how will national handling proceed? We could, for example, see some BNSF unionized workers collecting higher wages and working under different rules than other BNSF unionized workers, or CSX unionized workers collecting higher wages and working under different work rules than NS unionized workers. Such is the result of fragmented collective bargaining.
“As legendary NCCC chief labor negotiator Bill Dempsey (later President of the Association of American Railroads) said in another context, ‘This is a rat hole worth watching.’ Or, as SMART-TD’s late General Counsel Clint Miller often intoned of open-to-doubt expeditions, ‘Let me know how this turns out for you.’ What is transpiring is, indeed, uncharted territory.
“A postscript to this is that member ratification of these on-property tentative agreements just became more difficult with news late Oct. 3 that striking dockworkers agreed to return to work until at least Jan. 15, 2025, in exchange for a 62% wage increase over six years—vs. rail tentative agreements hiking wages by 17.5% over five years. And dockworkers may strike again in a few months over non-wage issues such as automation, which is a cousin of railroad industry one-person crews.
“While there are reasons for the difference in wage boosts, there is an adage that when collective bargaining answers are more complicated than the questions, a ratification vote is in danger—especially when the already suspect answers are subject to misleading social media commentary.
“Further jeopardizing ratification is that unionized rail workers, already angry that President Biden—who self-identifies as the most pro-union President in history—blocked rail unions from striking in 2022, but allowed an equally economy-jolting dock strike. That a Presidential election wasn’t looming in 2022 won’t be the focus of unionized rail workers. What they will see is that when a strike was allowed, the strikers cashed in—62% vs. 17.5%. And it isn’t because of differences between the RLA and the National Labor Relations Act governing longshoremen collective bargaining. Once the RLA runs its course, as it had in 2022, Biden or his successor is under no obligation to act. The plot has definitely thickened.”
Let’s hope it doesn’t thicken into highly compacted fertilizer, which we all know can explode under the right conditions.
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