For almost a century, the Railway Labor Act (RLA) has governed collective bargaining between freight railroads and labor organizations. The structured RLA process supports railroads in providing dependable service to customers and competitive compensation to rail workers. The most recent round of national negotiations resulted in a historic 24% wage increase over five years, additional lump sum bonus payments, and health benefit enhancements.
Although collective bargaining agreements do not expire under the RLA, they generally have “amendable” dates when the parties can initiate a new round of bargaining by exchanging “Section 6 notices.” These notices, which are named for the section of the RLA that defines bargaining procedures, include the proposed contractual changes the parties are seeking.
After Section 6 notices are served, labor and management negotiating teams engage in direct (i.e., unmediated) discussions regarding the proposed changes to agreements. The parties may pursue direct bargaining for as long as they mutually desire. Direct bargaining concludes when one of four actions occurs:
1. The parties reach agreement,
2. Either side unequivocally terminates negotiations,
3. A party requests mediation under the auspices of the National Mediation Board (NMB), an independent federal agency that facilitates the resolution of labor management disputes within the nation’s railroad and airline industries, or
4. The NMB proffers mediation on its own accord.
The freight rail industry’s negotiations generally have been conducted on a national, multi-employer basis, though some topics are handled in local-level bargaining directly between carriers and individual rail unions. During the national negotiations process, the National Carriers’ Conference Committee (NCCC) represents the largest (Class I) railroads and many smaller carriers. The NCCC is a multi-employer committee led by the chairman of the National Railway Labor Conference. The vast majority of freight rail employees are represented by 12 major rail unions, which sometimes bargain in coalitions.
Should negotiations enter mediation, the NMB assumes control of the schedule, location and format of negotiations. The NMB’s goal is to facilitate an agreement that is mutually acceptable for all parties.
Under the RLA, the NMB is obligated to use its “best efforts” to bring the parties to agreement. There is no timeline for the mediation process. While parties can request that the NMB release them from mediation, the board has no obligation to do so.
If the NMB determines further mediation will not bring the parties to agreement, the agency will urge the parties to accept binding arbitration to resolve their bargaining disputes. Either party is free to reject arbitration, but if both parties accept, an arbitration board will issue a final and binding decision regarding the terms of the parties’ agreement. If either or both parties reject arbitration, the NMB will release them from the mediation process and into a 30-day cooling off period.
Should either party reject the NMB’s proffer of arbitration, the board will notify the parties that its mediatory efforts have failed. This notification triggers a 30-day cooling-off period. During this time, neither party can engage in tactics such as a strike or lockout. This period is intended to provide additional time for parties to reach an agreement before any disruption to interstate commerce is possible.
If the NMB determines that the bargaining dispute threatens to interrupt interstate commerce, it will notify the president of the United States. The president can then choose to appoint what is known as a Presidential Emergency Board (PEB) to investigate the dispute and recommend solutions. If a PEB is appointed, the RLA imposes additional cooling-off periods.
When faced with these circumstances in national freight rail bargaining, the president typically appoints a PEB. Under the RLA, the president selects the size and members of the PEB. Once appointed, PEB members (typically experienced professional arbitrators) have 30 days to issue a report with their findings and non-binding recommendations for a resolution.
Throughout this process, parties are prohibited from engaging in “self-help” tactics.
For 30 days following the issuance of the PEB’s report, the parties are prohibited from engaging in “self-help” tactics.
Since the enactment of the RLA in 1926, most national freight rail negotiations have resulted in voluntary settlements without any service interruptions. However, in rare instances when the parties have not reached an agreement before exhausting the RLA negotiation process, Congress generally steps in to prevent or put an end to service disruptions. Past congressional measures have included additional cooling-off periods to prolong negotiations, implementation of PEB recommendations or compulsory arbitration.
See what key topics are discussed during bargaining and how they impact the rail industry and its workforce.
The last round of national bargaining included more than 30 railroads represented by the National Carriers’ Conference Committee and 12 rail unions representing more than 100,000 freight rail employees. Some carriers and unions have already reached agreements covering the period through 2029 and will not need to participate in the upcoming round.
