Freight Railway Workers Strike Prevented

Congress exercised the power it has under the Railway Labor Act to prevent a freight railway workers strike by ratifying the agreement that was negotiated by railway workers and management. The Labor Department issued a final rule that allows retirement plan fiduciaries to consider climate change and other environmental, social and governance (ESG) factors when selecting retirement investments. The US Court of Appeals for the Ninth Circuit decided that the time spent by turning on and loading programs on computers was compensable under the Fair Labor Standards Act (FLSA). The leadership of the National Labor Relations Board (NLRB) wrote to congressional appropriators warning them of a budget crisis if Congress does not authorize additional funding.


President Biden Signs Bill Averting Rail Strike – President Joseph Biden signed a bill (H.J. Res 100) that ratified the agreement between the freight railroads and twelve unions representing 115,000 railroad workers. Members of four of the unions rejected the agreement setting up the possibility of a strike starting as early as December 9th. When signing the agreement, the President stated, “So much of what we rely on is delivered on our rail, from clean water to food and gas and every other good. A rail shutdown would have devastated our country.” 


The contract that was negotiated between the parties included provisions that would increase wages by 24% over five years, with the raise retroactive to 2020 and caps health insurance premiums. The reason for the rejection of the contract by four of the unions was that the agreement only included one day of paid sick leave. The House of Representatives passed a separate resolution mandating seven days of paid sick leave, but the additional sick leave was not approved by the Senate.


The Railway Labor Act that was passed in 1926 gives Congress the authority to resolve disputes between railroads and labor unions as part of the commerce clause powers contained in the Constitution and is designed to prevent disruptions to interstate commerce. The congressional action makes a strike by the railway workers illegal.


DOL Issues Final Rule Allowing Retirement Plans to Consider Climate & ESG – The U.S. Department of Labor (DOL) released a final rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, allowing retirement plan fiduciaries to consider climate change and other environmental, social and governance (ESG) factors when selecting retirement investments and exercising shareholder rights. The rule becomes effective on January 30, 2023. “Today’s rule clarifies that retirement plan fiduciaries can take into account the potential financial benefits of investing in companies committed to positive environmental, social and governance actions as they help plan participants make the most of their retirement benefits,” said Secretary of Labor Marty Walsh.


The new rule modifies a rule that had been promulgated in 2020. According to the DOL, the final rule clarifies that a fiduciary’s duty of prudence has to be based on “factors that the fiduciary reasonably determines are relevant to a risk and return analysis and that such factors may include the economic effects of climate change and other ESG considerations on the particular investment or investment course of action.”


Turning on Computer Is Compensable – The United States Court of Appeals for the Ninth Circuit ruled in the case of Cadena v. Customer Connex LLC that the time call center customer service agents spent turning on and loading programs on computers was compensable under the Fair Labor Standards Act (FLSA). The Ninth Circuit concluded that “The employees’ duties cannot be performed without turning on and booting up their work computers, and having a functioning computer is necessary before employees can receive calls and schedule appointments. Accordingly, turning on the computers is integral and indispensable to the employees’ duties and is a principal activity under the FLSA.”


The employer in this case operated a call center providing customer service and scheduling for an appliance recycling business. The plaintiffs worked as call center agents whose primary responsibilities were to provide customer service and scheduling functions over the phone. Their hours were recorded through a computer based timekeeping program that they had to access before performing other job duties. To reach the timekeeping program, employees had to turn on their computers, log in and open up the timekeeping system. The plaintiffs estimated that the average time to boot up their computers was between 6.8 to 12.1 minutes. They took their calls directly through their computers. The Ninth Circuit believed that the call center employees could not perform their principal duties “without a functional computer, booting up their computers at the beginning of their shifts is integral and indispensable and therefore compensable under the FLSA.”


At the end of their shifts, the employees would close out their programs, clock out and then log off and shut down their computers. There was a factual dispute as to whether employees were required to shut down their computers. Since this appeal was being heard following the granting of summary judgment dismissing the claims, the Ninth Circuit did not rule on whether the activities at the end of the day were compensable.


NLRB Leadership Writes to Congressional Appropriators – Lauren McFerran, Chair of the National Labor Relations Board (NLRB) and General Counsel Jennifer Abruzzo sent a letter to congressional appropriators advising them of the budget crisis at NLRB. According to the NLRB leaders, the Board has received the same appropriation since Fiscal Year (FY) 2014. Adjusting for inflation, this has resulted in a loss of one-quarter of its purchasing power. Unless the congressional appropriators increase funding, the NLRB will likely be forced to implement furloughs. The letter notes that labor costs absorb 80% of the NLRB’s budget and they have implemented a hiring freeze. The letter advised that the NLRB staff has an increasing workload and “further erosion of the Agency’s staff and resources will continue to harm case processing to the significant detriment of both employers and employees.” The agency also will have to absorb a 4.6% increase in employee pay effective January 2023. The federal government is only funded until December 16th, so Congress needs to approve additional funding, or a partial government shutdown will occur.


Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at