NJ Transit has rescinded its previous contract offer to the locomotive engineers, effectively forcing the two parties to start over in their five-year-old contentious labor dispute — and as the days tick down to a potential strike in mid-May.

The letter, obtained by NorthJersey.com and penned to Tom Haas, general chairman of the Brotherhood of Locomotive Engineers and Trainmen, said agency officials look forward to "re-engaging" in negotiations and proposed meeting on Monday morning. Last week, the vast majority of the BLET's voting members shot down a tentative agreement reached with the railroad that sought to settle the contract dispute and avoid a strike.

"The union voted down an agreement that was negotiated in good faith. If the deal we negotiated would have provided an average BLET member $172,000 a year in salary doesn't make them happy, I want to know what the 372 members who voted down the agreement think is reasonable," said Kris Kolluri, president and CEO of NJ Transit. "Look forward to hearing their proposal."

The BLET did not immediately provide a response for comment about the withdrawn offer.

Tom Haas, general chairman for the BLET, earlier told NorthJersey.com that the union is not putting forth a new proposal.

"Instead we have raised with NJT management what the membership sees as shortcomings in the agency’s demands and we’ve asked management to provide us some clarity on how — if it all — they're willing to address those issues," Haas said.

"The members who work at NJT reviewed the tentative agreement and then they spoke at the ballot box and told management that their demands fell far short of what the overwhelming majority found to be acceptable," he said. 

NJ Transit launched a landing page on its website to rebut some claims and provide facts about the costs associated with the raise proposal pitched by the union.

"Accepting the BLET’s current demands would cost taxpayers and NJ Transit $1.363 billion between July 2025 and June 2030, $684 million more than what was tentatively agreed to by BLET leadership in March," NJ Transit said. To meet those demands, the agency said, it would have to increase fares 17% starting July 1, increase the corporate transit fee by 27%, or drastically reduce service systemwide.

A growing number of business and industry groups in the state are pushing back against the locomotive engineers union and urging the members to come to an agreement with NJ Transit.

The possibility of raising the corporate transit fee is a major sticking point for industry organizations.

Last year, Gov. Phil Murphy signed off on a budget that approved a new five-year fee that levies a 2.5% charge on businesses that make more than $10 million in profit annually, a policy the business groups didn't endorse, but eventually supported because it was being dedicated to NJ Transit.

Now, the idea that the fee would have to increase sharply to cover soaring costs for union raises — which would have to be applied to other NJ Transit unions because of "me too" clauses — has the business organizations up in arms.

The New Jersey Chamber of Commerce, Hispanic Chamber of Commerce, Chamber of Commerce Southern New Jersey and New Jersey Business & Industry Association released statements this week saying the proposal from the BLET is unfair and unsustainable.

"Hiking the Corporate Transit Fee is simply not an option. It discourages growth and investment. At the same time, raising fares on working families — many of whom are already struggling with inflation and housing costs — would push people off the trains and deepen inequality," said Tom Bracken, president and CEO of the state Chamber of Commerce.

Business & Industry Association President and CEO Michele Siekerka said raising the fee by 27% "is clearly something that New Jersey’s highly taxed job creators cannot afford. Under the tentative agreement that was rejected by the rank and file, locomotive engineers would have been earning wages that are competitive within the region." She urged both parties to "redouble" their efforts and reach an agreement.

The main issues

Among the contentions from the union is that the members should be paid similarly to what engineers at other nearby railroads, like Amtrak, Long Island Rail Road and Metro-North, are paid.

The contracts being negotiated included two contract periods. There was a total of 12% in wage increases in the first period, retroactive from Jan. 1, 2020, to June 30, 2024. Of the 15 rail unions, the BLET is the only one that didn't agree to that wage proposal. The second contract period, from July 1, 2024, through June 30. 2027, included an annual 3% raise, which 11 of the 15 rail unions have approved so far. The BLET and NJ Transit were also negotiating a possible one-year, 4% increase starting July 1, 2027, which was included in the tentative contract voted down in March.

Haas said he is fearful that without parity with other nearby railroads, engineers will leave for other agencies. The answer, he said, "is to pay a competitive wage to help with both recruitment and retention."

"A stopwatch is ticking. We're rapidly coming up on the time when NJT can lock out engineers. Management hasn't done anything to make the clock stop," Haas said.

Kolluri said of the members, "I met them more than halfway to their ask," but that he has an obligation to taxpayers to come to a resolution that is "fiscally responsible."

"I am not sure the riders are going to be tolerant of a demand that is more than what we offered and what was accepted," Kolluri said, adding that he is at the negotiating table but also in "preparation mode for a potential strike."