Michael LeRoy is an expert in labor law and employment relations at the University of Illinois Urbana-Champaign. LeRoy, who advised the Council of Economic Advisers for President George W. Bush during an emergency labor dispute in 2001, spoke with News Bureau business and law editor Phil Ciciora about the averted strike with railroad unions that could’ve crippled the economy before the midterm elections.
Railroad unions were on the verge of striking at an inopportune time, politically speaking. What were the underlying issues?
Unionized railroad employees had been working without a contract for more than two years and, like many workers in the current economy, they wanted more pay and better benefits such as more time away from work for family and medical appointments.
With the tentative deal in place brokered by the Biden administration, it looks like they got what they wanted. It’s no surprise, though. The railroad unions had a ton of leverage, especially considering where we are on the political calendar and the stubbornly high inflation we’re experiencing at the moment.
The Railway Labor Act of 1926 set the rules for railroad unions’ bargaining with freight-rail companies. How did the law affect the timeline for these negotiations?
Up to this point, the rail unions and a group of employers had negotiated without success. By law, President Biden appointed an emergency board consisting of experienced arbitrators to hold hearings and receive contract offers. The board issued a union-friendly proposal, which the unions said did not meet all of their demands. That initiated a 30-day “cooling off” period that was set to expire at midnight Sept. 16.
I would argue that the Railway Labor Act is falsely premised on the idea that unions and employers “cool off” after an emergency board proposal is rejected. Typically, union and company negotiators stew for 30 days and, human nature being what it is, are more dug-in as the time on the clock expires.
Congress set up this system to allow public opinion to bear down hard on the parties in order to reach a settlement. Since the nation’s economy suffers on the rare occasions when a rail strike does occur, it puts a lot of pressure on the parties to reach an agreement. It would have been very bad news for the Biden administration if a strike had occurred for even one day. There’s never a good time for a rail strike or a lockout.
Did the negotiators actually pay attention to public pressure?
To a degree, yes. Republican senators were proposing a straightforward resolution: Their bill adopted President Biden’s emergency board proposal as a basis to end the dispute, a proposal that would have raised rail workers’ pay about 24%.
The Republican bill made a lot of sense. It would have spared the nation a crippling and inflationary strike, and it used the emergency board’s proposal. It also built on the last emergency rail dispute we had, which occurred in 1992 and was settled by Congress after a two-day strike.
The sticking point was, Democrats didn’t want to vote for the Republican bill because they didn’t want to offend labor unions. Republicans knew this, and it was a well-executed strategy on their part, one that put Democrats in the uncomfortable position of having to lean on the rail unions to accept the proposal.
So the law worked in the way Congress envisioned it to work in 1926, in that public pressure built for both sides to reach a settlement. As in previous rail labor disputes, the president was personally involved in discussions with union and company leaders. But generally speaking, the law is terribly flawed because of the brinksmanship it brings about.
Could President Biden have ended the dispute with an executive order?
The Railway Labor Act doesn’t mention this, but presidents have taken extraordinary measures into their own hands during two other labor disputes. In 1952, President Truman used an executive order to seize a steel mill where workers were striking, and in 1981, President Reagan fired about 10,000 striking air traffic controllers. These actions were controversial but successful. However, they occurred under different labor laws, and not under the law that pertains to the rail industry.