Rail deal heads to unions for a vote as strike fears wane

Rail union leaders said they were starting to line up membership votes on a tentative agreement with the nation's largest rail freight carriers to avert a nationwide strike that could devastate large swaths of the economy.

Parties to the agreement, brokered by the Biden administration early Thursday, seemed optimistic it would hold.

Unionized workers still need to vote to ratify the compromise. 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 a vote.

The heads of the two unions that had been hold outs on a previous effort to settle the dispute welcomed the new deal, which includes wage hikes, freezes in health care costs and changes in work rules.

"Our unions will now begin the process of submitting the tentative agreement to a vote by the memberships of both unions," according to a joint statement by Jeremy Ferguson, president of the SMART Transportation Division; and Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen.

A notable breakthrough for the unions was a change in the railroads' time-off policies, which had been a major obstacle to a deal.

"For the first time, our unions were able to obtain negotiated contract language exempting time off for certain medical events from carrier attendance policies," Ferguson and Pierce said.

The Association of American Railroads, an industry group, 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 gaze of Labor Secretary Marty Walsh, a former union president, arriving shortly after 9 a.m. Wednesday and departing pre-dawn on Thursday.

At the White House, President Joe Biden called it “a win for tens of thousands of rail workers who worked tirelessly through the pandemic” and will now “get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned.”

“The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come,” he added in a statement.

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 if there were a shutdown.“The economic impacts could have been significant,” a White House official said of the intercession by Biden.

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.

Already, preemptive impacts from the potential strike had begun to pile up. 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 cease 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 who own the tracks.

Industry groups halted shipments of grain, including corn and soy, and carriers have 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 the strike.

Any work stoppage could 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.

Eleanor Mueller, Christopher Cadelago, Tanya Snyder and Alex Daugherty contributed to this report.