The deal with unions representing more than 50,000 engineers and conductors was announced just after 5 a.m. in a statement from the White House, which it called an “important victory for our economy and the American people.”
A verbal agreement was reached between the two sides at around 2:30 AM ET according to the sources, and the final hours were spent working out the details.
“We are very proud of what has been accomplished,” said Jeremy Ferguson, President of the Leaders Guild and one of the leaders participating in the marathon session. He thanked Biden and Labor Department officials involved in the talks for the deal.
“Everyone has come together to make sure we can get our members what they deserve,” he said.
“This is the quality of life issue we’ve been trying to get for our members since the bargaining started,” said Dennis Pearce, president of the Engineers’ Union and another union official involved in the talks.
A win for workers, railways and the economy
The deal gives union members an immediate 14% raise with a late pay dating back to 2020, and raises a total of 24% over the five-year contract period, running from 2020 through 2024. It also gives them cash bonuses of $1,000. general.
Few other details of the deal have been announced so far. But the statement from Biden noted that the main sticking point — involving labor rules and scheduling issues — that made the country within a day of the first national rail strike in 30 years had been addressed in favor of unions.
“It is a victory for the tens of thousands of railroad workers who have worked tirelessly through the pandemic to ensure that American families and communities have deliveries that keep us going through these difficult years,” Biden said in a statement. “These railroad workers will have better salaries, improved working conditions, and peace of mind about health care costs: all of this is their hard earned.”
The dispute was over staffing and scheduling rules that union leaders said had brought their membership to the breaking point. Unions say the railways are asking their members to be “on call” and to be ready to come to work on short notice, seven days a week. The leadership of the two unions said their members would not accept a contract without changes to those work rules.
Biden described the deal as “a victory also for the railroad companies that will be able to retain and hire more workers in an industry that will continue to be a part of the backbone of the American economy for decades to come.”
It’s an important victory for Biden, who has faced nothing but bad choices if no deal is reached. Support for the Congressional action that the business community sought to impose a contract on workers would have angered his supporters among unions. Letting downtime lead to dire economic consequences ahead of the midterm elections.
How did we get here
It also imposed a 60-day cooling-off period during which unions could not strike and management could not close workers. The cooling-off period was due to end early Friday.
Biden could not have ordered railroads to continue operating once the cooling-off period ended on Friday. Congress could only act to bring unions back to work if a strike had begun.
With a wide range of business groups calling on Congress to act, Republicans prepared legislation that would give the railroad management the deal they wanted. But Democrats opposed such action.
A union source said Democrats’ refusal to side with the administration was key to the talks.
“The Senate leadership that did not act gave space to these negotiations,” the union source said. He said Walsh “clung to” the union during the negotiations.
“It was work yesterday,” he said, with plenty of back and forth.
“Our people will not give up,” the source said. “Our people would have been struck” if no agreement had been reached by Friday’s deadline.
The American Railroad Association also praised the deal and thanked the Biden administration and the unions themselves for their role in reaching an agreement.
The wage and bonus increases had been recommended by a presidential committee tasked with trying to find a solution to the impasse in negotiations at the time.
Those terms were lucrative enough for most rail unions to agree to tentative deals in recent weeks, and engineers and conductors, faced with working and scheduling rules that didn’t apply to others, refused to sign without easing on the scheduling issue. .
Troubles have already begun
Railroad customers who had braced for major problems expressed relief that the strike had been avoided.
“This is great news for the economy,” Eric Hublin, CEO of the National Association of Wholesale Distributors, said in his New Day appearance on CNN Thursday. “My phone has been ringing nonstop for the past 48 hours, and I’ve been talking to distribution leaders from across the country, who have been talking about some of the disastrous consequences it could have for America’s supply chain and economy.”
Higher food and car prices and shortages of consumer goods would have been more likely in the holiday shopping season if there had been a prolonged strike, according to business leaders and economists.