US supply chains, economy may be hit by massive Canada rail strike – National & International News – THU 21Aug2024

US supply chains may be hit by massive Canada rail strike.

Texas judge strikes down FTC’s nationwide ban on non-competes.

US supply chains may be hit by massive Canada rail strike

Months of negotiations on new labor contracts between the Teamsters union and Canada’s two largest rail lines, Canadian Pacific Kansas City (CPKC) and Canadian National (CN) railroads, have apparently reached an impasse. As was the case in the 2022 rail labor dispute in the US, workers are demanding safety improvements as well as better scheduling practices that will allow them to make doctors’ appoints and plan time with their families. The railroads have offered some wage increases but have not done enough to answer workers’ other demands. 

Unless there is an eleventh-hour deal tonight, CPKC and CN will initiate a lockout of workers at 12:01 Thursday, essentially shutting down most of Canada’s rail traffic from coast to coast. US Teamsters has is also considering refusing to operate the Canadian companies’ trains within the United States in solidarity with Canadian union members.

Canada’s government, led by Prime Minister Justin Trudeau, has so far refrained from intervening to prevent a strike. When the Biden administration used its powers to block the 2022 strike, this proved to be very unpopular, even though the US rail workers ultimately had a lot of their key demands met in subsequent negotiations. However, if the strike drags on, Canada’s government could draw up legislation that would essentially draft workers back to work while negotiations continue.

Impact on US

Canada is one of America’s most important trading partners. About 75% of Canada’s exports are to the US, and most of those products travel over rail. A nationwide Canadian rail shutdown could halt deliveries to the US of cars, petroleum products, steel, timber, grain and other foodstuffs, potash (used in fertilizer) and a range of other key products.

Even a brief strike would be a significant disruption for businesses and consumers in the US that rely on Canadian exports. A prolonged strike could lead to shortages and price hikes up and down the supply chain. Prices of food, construction materials, cars and trucks could all be impacted. Functioning in various US manufacturing sectors could also take a hit. This could potentially kickstart inflation again just as it was beginning to ease ahead of the November election.

Click here for the full story (opens in new tab).

Texas judge strikes down FTC’s nationwide ban on non-competes

In April 2024, the Federal Trade Commission issued a rule banning non-compete clauses in employment contracts. Non-competes bar workers from seeking work in a similar industry if they leave their current employer. These clauses have been used in a wide-range of industries, including banking, manufacturing, and tech and even low-wage occupations like hairstyling, fast food and retail.

Before approving the rule change, the FTC heard from thousands of workers in numerous industries who had seen their career mobility stymied by non-competes. The FTC found that non-competes unfairly suppress wages and worker mobility by keeping workers trapped in jobs when they could be seeking employment with better wages and benefits, or even starting their own business. The rule banning non-competes was to go into effect on September 4, 2024.

Now, a federal judge in Texas has effectively blocked the rule-change from going into effect. Judge Ada Brown of Texas’ North District federal court ruled that the FTC exceeded its authority by enacting the ban. This followed a lawsuit by the US Chamber of Commerce and other firms claiming they would be irreparably harmed. Companies claim non-competes are necessary to maintain trade secrets and to protect investment in training new employees.

The FTC will likely appeal the ruling and the case could ultimately wind up before the US Supreme Court. Recent rulings by the Supreme Court suggest they are more likely to side with business interests at the expense of federal agency power.

Click here for the full story (opens in new tab).