The Senate ultimately approved the option without paid sick leave, and President Biden signed it, sticking to terms that mirrored what the White House brokered in September — a roughly 24 percent pay increase by 2024, more flexibility to take time off for medical appointments , and a paid personal day. The terms did not include new, dedicated sick leave.
After forcing a railroad deal, Biden is working to smooth labor relations
But why was paid sick leave such a sticking point—and why weren’t workers getting it?
Rail companies have said they need to maintain their attendance policies to ensure adequate staffing. Some industry experts and union officials say railroads no longer have enough workers to cover for absent colleagues because companies in recent years have moved to “precision scheduled railroading,” a system designed to improve efficiency and cut costs. Instead of running trains that carried only one type of product—which saw the trains wait for long stretches before loading enough to justify departure—rail companies now have multiple trains that carry a mix of freight on a set schedule. Fixed scheduling allows companies to use the same crew more often than they could under the old system.
Between November 2018 and December 2020, the railroad industry lost 40,000 jobs, according to a report by the Bureau of Labor Statistics. The bureau described precision scheduling as possibly the “most widely recognized cause of the decline in rail transportation employment,” although the pandemic, trade uncertainty and a decline in U.S. coal consumption also hurt the industry.
At the time, Wall Street cheered the transition to a new system. In 2019, shares of Norfolk Southern and Union Pacific rose 30 percent, and shares of Kansas City Southern rose more than 60 percent.
But the workforce cuts “led to this kind of crisis in work-life balance,” said Todd Vachon, a labor professor at Rutgers University who sees short staffing as “a model to maximize profits to get high returns to shareholders.”
And unions say precision rail planning has left little room to give workers the benefits they need.
“There is a direct link to these business decisions that the railroads have made — either PSR itself or just these attendance policies that are an offshoot of PSR — that force people to work more than any average American worker wants to do or can do,” said Dennis Pierce, the national president of the Brotherhood of Locomotive Engineers and Trainmen, an influential union that narrowly voted to ratify the White House proposal.
In a statement to The Washington Post, Brendan Brannon, president of the National Railway Labor Conference, which represented the industry at the bargaining table, rejected the idea that paid sick leave represented a sticking point in labor negotiations, arguing that “all railroad workers have some form of for paid sick leave.”
Association of American Railroads spokeswoman Jessica Kahanek pointed to a list that includes several leave options, such as a system where sick employees can temporarily remove themselves from a list of available workers, as well as time off under the Family and Medical Leave Act. And all employees have a long-term sickness benefit that can pay a part of the worker’s income for up to 26 weeks, the railway association says.
But time off according to the Act on Family and Sick Leave is unpaid according to the Ministry of Labour. And the system that allows employees to remove themselves from availability is unpaid, said union attorney Richard Edelman. Workers could also be disciplined for using it, he added.
Furthermore, he said that the long-term sick pay is intended for more serious illnesses or injuries and will not help employees who, for example, get the flu or need emergency dental surgery. “All the things that are one or two day things — railroad employees don’t have that,” Edelman said.
Tony Hatch, a longtime industry analyst, said the financial community wants a more constructive relationship between railroad management and their workers.
“We do not want to see semi-slave labor here,” he said. “We want to see a happy workforce because the railroads have a great opportunity to recapture … market share.”
The negative effects of planned railroads and related staff reductions are a “boogeyman” that has been exaggerated, Hatch said. But he said the system has made the industry more fragile and needs more flexibility to deal with emergencies such as the coronavirus pandemic and sick workers.
“One of the things you need to run a scheduled railroad is crew availability,” Hatch said. “And if people quit, you have to do something about it.“
The Rail Labor Conference’s Brannon said workers and companies must keep talking.
“While the round of negotiations has ended, conversations about creating greater predictability and work-life balance for rail companies will continue,” he said.
Vachon, the labor professor, said nothing should prevent railroad companies from giving their employees paid sick leave. He said it’s about paying for more workers and maintaining a rotating pool of people to cover shifts while others are out.
“There is nothing inherent in the rail industry to make paid sick leave unsustainable,” he said, adding that rail workers in Europe have the advantage. “This idea that it’s not possible is really just a cop-out. … Companies are deciding how to spend their resources, and they’re using that money to buy back their stock and give dividends to shareholders instead of investing in their workers.”