The Bargaining Process

Learn how collective bargaining works

Collective bargaining for the railroad industry differs from negotiations in other industries, because of the railroads’ importance to the American economy. Most importantly, railroads are governed by the Railway Labor Act (“RLA”), a federal statute designed to bring the parties to agreement without disruptions to rail transportation.

The RLA includes numerous safeguards that help overcome bargaining stalemates. Although the parties often reach agreement without any outside intervention, the process can include mediation by an independent federal agency and action by the President of the United States if necessary to facilitate resolution of the parties’ negotiations.

Learn more about the RLA and the various steps in the bargaining process in the slides that follow.

Railway Labor Act

Central to rail labor negotiations is the Railway Labor Act (RLA), enacted in 1926. For more than nine decades, the RLA has governed the national, multi-employer bargaining between freight railroads and the labor organizations representing railroad employees.

Under the law, collective bargaining agreements remain in force indefinitely until the parties agree to change them. Without contract expiration dates, the negotiators don’t work against a fixed deadline. Instead, they proceed through a structured and regulated process, which may include compulsory mediation and other third party resources, designed to bring the parties to agreement without service disruptions.

National freight rail bargaining has been remarkably successful in reaching contract settlements without crippling strikes or lockouts. In fact, over the past 30 years, there have been only two days of service disruptions arising from national rail bargaining; the last such day was in 1992.

See a list of the parties involved in the most recent collective bargaining round.

Exchange of Section 6 Notices

Although collective bargaining agreements do not expire under the RLA, they generally have “reopener” dates. At such times, the parties can initiate a new round of bargaining with the exchange of “Section 6 notices.”

Named for the section of the RLA that defines the bargaining procedures, these notices propose the contractual changes the parties are seeking.

Direct Bargaining

The freight rail industry’s labor negotiations are conducted on a national, multi-employer basis.

During the negotiation process, the National Carriers’ Conference Committee (NCCC) – a multi-employer committee chaired by the Chairman of the National Railway Labor Conference – represents the largest (Class I) railroads and many smaller carriers. The employees are represented by 12 major rail organizations, which sometimes bargain in coalitions.

Direct Bargaining Ends

The parties may pursue direct bargaining for as long as they mutually desire to do so. 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, or
  4. The National Mediation Board proffers mediation.


Should negotiations enter into the mediation stage, the National Mediation Board assumes control of the schedule, location, and format of negotiations. The NMB’s goal is to facilitate a mutually acceptable agreement by the parties.

Under the Railway Labor Act, 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 NMB has no obligation to do so.

Binding Arbitration

If the National Mediation Board determines that further mediation will not be successful in bringing 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. If both parties accept, the arbitration board’s award is final and binding on them. The parties are also free at any time during their bargaining to agree to binding arbitration.

Post-Mediation Cooling Off Periods

Should either party reject the NMB’s proffer of arbitration, the NMB 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 “self-help” tactics such as a strike or lockout.

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 the Board 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.

Presidential Emergency Board

Under the RLA, the President selects the members of an Emergency Board. The number of board members is up to the President. The PEB members (typically experienced professional arbitrators) have 30 days after their appointment to issue a report with their findings and recommendations for a resolution.

Throughout this process – and for 30 days following the issuance of the PEB’s report – parties are prohibited from engaging in self-help tactics.

While a PEB’s recommendations are not binding, they generally provide an avenue for the parties to reach agreement.

Post-PEB Cooling Off Period

Following the issuance of the PEB’s findings and recommendations, negotiations enter a final 30-day cooling-off period under the RLA.

Congressional Action

Since the enactment of the Railway Labor Act 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 exhaustion of the RLA negotiation process, including in the most recent bargaining round, Congress has generally stepped in to prevent or terminate service disruptions. Past congressional measures have included additional cooling-off periods to continue negotiations, implementation of PEB recommendations, and compulsory arbitration.

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