Norfolk Southern has agreed to give one of its unions the paid sick days it demanded for members in negotiations last year, and is in talks to grant sick days to its other unions as well.
The announcement comes hours after the company’s chief financial officer, Mark George, told investors that it is still struggling to fill the open positions it has at almost all 95 locations where staff is based, George also said the company may have cut staff too deep during the early days of the pandemic, and that it has had trouble bringing back laid-off staff members.
“Norfolk Southern’s success is built upon the incredible work our craft railroaders perform every day, and we are committed to improving their quality of life in partnership with our union leaders,” said Norfolk Southern CEO Alan Shaw in a statement announcing the deal.
The deal is with the Brotherhood of Maintenance of Way Division, the union representing 3,000 track workers at Norfolk Southern, and the third largest union at the railroad behind the unions representing conductors and engineers. Norfolk Southern has about 19,000 employees total and about 15,000 of whom are union members. But that’s down more than 20% from the 24,600 employees it had — including nearly 20,000 union members — in 2019, ahead of the pandemic.
The agreement, announced by the railroad late Wednesday, also comes as the company struggles with the bad public relations caused by a derailment of one of its freight trains in East Palestine, Ohio, which led to the release of toxic chemicals into the air and water.
The company has pledged to give affected residents about $6.5 million in compensation and assistance, and says it will comply with a demand by the Environmental Protection Agency to pay for the cleanup.
But it’s still facing criticism for spending nearly $18 billion on share repurchases and dividends over the last five years, more than 2,500 times what it has pledged to residents and the community.
Norfolk Southern’s concession comes two weeks after another railroad, CSX
(CSX), reached a deal with two of its unions to provide four sick days a year. The Norfolk Southern deal provides up to seven sick days per employee.
Norfolk Southern and the nation’s other major freight railroads all faced criticism last year for refusing the unions’ demands for paid sick days for their members.
Many of the union members voted to reject tentative labor agreements that offered them an immediate 14% raise, including backpay, because of the lack of paid sick days. The unions argued that seven sick days a year for all their members would have cost all the railroads $321 million annually, a small fraction of the record profits they were reporting.
But the railroads refused to give in and eventually Congress imposed the unpopular contracts on the unions without the sick day provision, even though a separate sick day provision had the support of most member of Congress.