A potential nationwide rail strike was halted yesterday by President Obama, who signed an Executive Order creating Presidential Emergency Board 243 (“PEB”) pursuant to the provisions of the Railway Labor Act (“RLA”). The dispute involves 11 rail labor unions and the National Carriers’ Conference Committee, which represents CSX, Norfolk Southern, BNSF, Kansas City Southern, Soo Line, Union Pacific and other railroads. The parties failed to reach agreement on a new collective bargaining agreement through negotiations and were permitted to go on strike or engage in a lock-out beginning October 7, 2011. The President’s creation of a PEB prevents such action under the terms of the RLA. President Obama appointed five members to the PEB – Ira F. Jaffe (Chair), Roberta Golick, Joshua M. Javits, Gil Vernon, and Arnold Zack.

Section 10 of the RLA allows the President to create a PEB when a dispute that has not been resolved by the parties “threaten[s] substantially to interrupt interstate commerce” to such a degree as to threaten “to deprive any section of the country of essential transportation service.” The RLA provides that the PEB is to investigate the dispute and make a report to the President within 30 days after the PEB’s appointment. During this 30 day period, the parties must not change the conditions of employment out of which the dispute arose (including no strike or lock-out). The report created by the PEB is non-binding, and is meant to narrow the issues and allow the parties to reach a voluntary settlement. However, if the parties fail to reach agreement, it is expected that Congress will step in and pass legislation imposing the terms of a new collective bargaining agreement. This prospect is a crapshoot for both sides, so there is a great incentive for them to reach agreement.

In 2006, I attended a rail law seminar at which Joshua Javits (a member of PEB 243) presented a paper titled, “A Neutral’s Perspective on Presidential Emergency Boards.” His presentation perhaps gives us a glimpse into what the parties should expect in the report of the PEB. He wrote:

“Neutrals like to avoid legislating new terms of an agreement for the parties. Neutrals are more comfortable providing guidance to the parties rather than imposing new terms on unwilling parties. Therefore, emergency boards tend to use a light touch. They recognize and encourage voluntary resolution through collective bargaining and defer to the parties’ power and interests…As Harry Rissetto, an eminent RLA practitioner, [said] the ‘mantra’ of the emergency board is, ‘If you can’t get it in bargaining, you won’t get it before an emergency board.’ Like doctors, the first principal of emergency board members is to ‘do no harm.’”

I wish the best of luck to all the brothers and sisters in rail labor involved in this dispute, and hope that a favorable resolution can be reached. If the current Congress gets involved, I’m not so sure that it will use such a “light touch.”