It’s Wednesday, May 10, 2017
RailFacts:Whathappensifmediationfailsinnational
bargaining
5/10/2017
BNSFandtheotherlargeU.S.railroadsbeganthelatestbargainingroundwiththreelaborunioncoalitions
(representingabout145,000railroademployees)inearly2015.Nowinthethirdyearoflabornegotiations,
thepartieshavebeeninmediationsinceatleastthebeginningofthisyear.
ThetransitionfrommediationtoaPEB
Thenegotiationsprocess,requiredbylaw,canbeveryslowandprotracted.Thepartiesarecurrentlyin
mediationafterbeingunabletoreachavoluntaryagreementindirectbargaining.Ifmediationfails,the
processcouldextendformanymonthsbeforetheNationalMediationBoard(NMB)releasestheparties
andaPresidentialEmergencyBoard(PEB)isformedbythePresident.
Atthatpoint,thepartieswouldeventuallyhavetheircasesheardbyaPEBappointedbyPresidentTrump.
ThetimelineundertheRailwayLaborActendsoncethePEBreachesaconclusionandreleasesits
recommendation.Thatpanel'sfindingsarenotbinding,andthepartiescanagreetothem,orseekselfhelp.CongresscanstepinatthatpointtoenactthePEBrecommendationorasolutionoftheirownto
avoidarailserviceinterruptionthatwouldbeharmfultotheU.S.economy.
ThereareseveralfactorsaddingdelaythatcouldbesignificantbeforeaPEBcouldbeestablished,
including:
• TheNMBisn'tfullystaffed.Currently,theNMBdoesn'thavetherequirednumberofmajority
Republicanmembersasrequiredbylaw,andnewmembershaveyettobenominated.Theprocessof
nominationstofillvacantpositionshasnotbeenmovingquickly,andthosenominationsstillrequire
Senateconfirmationbeforetheappointmentstakeeffect.
• Alackofpatternsettlementreachedwithoneormoreunions.Inthelastround,wedidhaveapattern
settlement,whichhelpedexpeditetheconclusionoftheround.thefamilyhealthcarebenefitsthey
receive.Bycontrast,railroadworkerspayonly21percentoftotalcostsonaveragefortheirfamily
healthcarebenefits.
BNSFbelievesthatavoluntarydealisalwaysbest,butthemediationprocessisdifficulttopredict.If
mediationisnotsuccessfulinitially,therecouldpotentiallybealongdelaybeforethebargainingroundis
settled.Unfortunately,thereisprecedentonbothairlineandrailroadnegotiations(Amtrakmostrecently)
wheretheNMBtookmanymonths,orevenyears,toreleasethepartiesfrommediation.
Bargainingroundperspectives
Ouremployeeshavedemandingjobsthatrequiretechnicalskillsandshouldbewell-compensated.As
such,railroademployeesarealreadyveryhighlycompensated(inthetop7percentofallindustries),and
haveenjoyedwageincreasesthathaveexceededinflationbymorethan50percent.Infact,overthepast
11yearsofwageincreases,wagesforrailunion-representedemployeeshaveincreased41.9percent.And
railroademployees'healthbenefitscurrentlyexceedalmostallsurveybenchmarksandplaceinthe
platinumlevelundertheAffordableCareAct(ACA)–anexceptionallyrichlevelofbenefitsslatedfor
taxationinthefutureunderACAtohelpeliminatesuchrichplans.Unionemployeesnowpayabout20
percentoftheiroverallhealthcosts(withplancostsrisingover30percentinthelasttwoyears)wherethe
nationaltrendismoreinlinewitha30/70employee/employersplit.
Therailroadsarenotseekingconcessionarylaboragreementsinthisround.Therailroadshaveproposed
payingwageincreasesthatareinlinewithinflation,matchingmarket-levelhealthcarebenefitsand
makingminorchangesinafewarchaicworkrulesthatlimitourabilitytosafelyandefficientlyservethe
needsofourcustomers.Ifwecandothis,wewillhelppositiontherailindustrytobeabletocompeteand
growitsbusiness.
Asabackdrop,ourindustryiscurrentlyfacingachallengingenvironment,withfundamentalshiftsin
severalsectors,includingourcoal,crudeoilandinternationalintermodalbusiness.AtBNSF,while2017
volumesareupslightlyover2016,theyarestillwellbelowtheirpeakin2006.Likemanyotherrailroads,
BNSFhasseennonetvolumegrowthoverthepastdecade.
Inaddition,transformativetechnologiesareforthcomingthatwillchallengeourindustryfurther,including
autonomoustrucksandtruckplatooning.Similarly,3-Dprintingtechnologycouldpotentiallylocalizemore
manufacturingandreducetheneedforlong-haulmovesofgoodsandparts.Wemusttransformand
adaptthewayweoperatetoremaincompetitive.Historypointstomanyotherindustries--includingsteel
andautomanufacturersaswellasairlines--thatwereslowtoreacttotransformativechangesand
subsequentlyfacedbankruptcies,drasticrestructuringandjobdeclines.
Thenegotiationwillberesolvedeventually,onewayoranother.Itcanberesolvedinmediation,ifparties
agree,oritwilleventuallybeheardbyaPEB.Thatprocesscouldbefurtherdelayedwaitingforthe
administrationtofilltheRepublicanvacanciesontheNMB.IfitdoescomedowntoaPEB,pastexperience
showsthatrailroadandairlineemployeeshavehadtowaitmanymonthsforaPEBwhenmediation
doesn'tproduceanagreement.
Weremainhopefulthatfurtherdelayandanuncertainoutcomecanbeavoidedbyreachingafairand
voluntaryagreement.Doingsowouldbeagoodthingwhenitcomestoprovidingandcreatingwell-paid
jobsinanindustrythatisessentialtothetransportationneedsofourcountry.
Formoreinformationonhealthcarecostsandtherailindustry,gotoraillaborfacts.org.
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