Some rail investors are calling for companies to adopt a proposal to give workers paid sick leave.
Currently, rail workers technically have no paid sick leave, a key demand in their contract negotiations.
Now, some railroad shareholders want reasonable paid sick leave to be included as a benefit.
After Congress voted to push through a contract for rail workers without additional paid sick leave, investors are stepping in - and they want workers to have time off.
Shareholders at both Norfolk Southern Corporation and Union Pacific Corporation filed proposals Monday that would require companies to give workers a "reasonable amount of employer-paid sick leave" as a permanent benefit.
Impact Shares and Trillium Asset Management, the two investor groups behind the proposals, both own less than .01% of the two railroad companies. The proposals will be put up for a vote at shareholder meetings if they're accepted.
"There's a really strong business case for paid sick leave," Kate Monahan, Director of Shareholder Advocacy at Trillium Asset Management, an ESG-focused investing firm that holds over 3,000 shares of Union Pacific, told Insider. "Getting workers paid sick leave cuts down on disease spread dramatically, leading to fewer absences. But it's also really considered a return on investment for companies - you have reduced turnover, reduced incidents where workers are coming to work but are not as productive because they're sick."
Norfolk Southern declined to comment, and Union Pacific did not immediately respond to Insider's request for comment. The railroads have previously estimated that guaranteeing 15 days of paid sick leave would cost the industry $688 million a year.
Three years of negotiations between rail companies and workers culminated in the potential for an economically disruptive December strike, all hinging on access to time off.
The workers, who technically have no paid sick leave but instead just general PTO, wanted 15 days. In a tentative agreement mediated by the Biden administration, rail companies offered just one additional personal day for workers. Ultimately, four out of twelve unions voted down that proposal. Paid sick leave - which has taken on particular importance in a covid-addled economy where workers are pushing for better conditions - was the key demand for rail workers.
But the risk of an economy-shuttering strike was too high for the Biden administration. President Joe Biden asked Congress to step in and vote to pass the tentative agreement, a unique power that the government can exercise over railroads and airlines due to the Railway Labor Act. Biden asked Congress to pass the agreement as is, in an attempt to quickly act and head off a strike that could cost the US economy $2 billion a day and jeopardize access to clean drinking water.
Some progressives stepped in to try and add a resolution that would give workers seven days of paid sick leave. That proposal passed the House, but fell short in the Senate - leaving the tentative agreement to be passed as is.
"I know that many in Congress shared my reluctance to override the union ratification procedures. But in this case, the consequences of a shutdown were just too great for working families all across the country," Biden said in a statement on the bill's passage.
"I have long been a supporter of paid sick leave for workers in all industries - not just the rail industry - and my fight for that critical benefit continues," he added.
Workers expressed disappointment, but not surprise over that outcome.
"This vote was a blatant endorsement of corporate America and the too big to fail corporations that are allowed to have free reign over the US economy," Michael Paul Lindsey, a locomotive engineer in Idaho who is a steering-committee member for Railroad Workers United, previously told Insider.
Now, additional paid sick leave could be put to a vote, if the shareholders pushing rail companies to consider it get their way.
"We believe paid sick leave to be essential to protecting and maintaining one of a company's - and the economy's - most important assets: workers," Marvin Owens, Chief Engagement Officer of Impact Shares which owns 451 shares in Norfolk Southern Corp., said. "Paid sick leave should not be seen by companies as an expense, but as a prudent investment - an insurance policy that will promote a strong workforce and, by extension, a healthy economy."