A union representing 6,000 rail workers said its members have voted against ratifying the tentative agreement brokered between rail companies, unions and members of President Joe Biden's administration in September.
The vote by the Brotherhood of Railroad Signalmen, the second union to reject the White House-brokered deal, elevates the likelihood of a nationwide strike when a negotiation deadline arrives in November.
The potential work stoppage could paralyze the nation's supply chain and transportation rail service as the U.S. enters peak holiday season.
White House Press Secretary Jean-Pierre, when asked about the union vote during a briefing on Wednesday, said Biden "remains focused on protecting America's families, farms and businesses by avoiding a rail shutdown."
"We continue to urge both sides to work in good faith and avoid even the threat of a shutdown," she added.
The vote against the contract centered on frustration with a lack of paid sick days, according to a statement from Brotherhood of Railroad Signalmen President Michael Baldwin. "For the first time that I can remember, the BRS members voted not to ratify a National Agreement," he said.
The rejection of the deal came despite a 24% compounded wage increase and preservation of the members' health care benefits, Baldwin added.
The National Carriers' Conference Committee, or NCCC, which represents freight railroads in national collective bargaining, expressed disappointment over the union vote.
The tentative contract "included the largest wage package in nearly five decades, maintained rail employees' platinum-level health benefits, and added an additional day of paid time off," the NCCC said in a statement.
The contract was rejected by roughly 60% of members in the the Brotherhood of Railroad Signalmen, while nearly 40% voted in favor of the deal, the union said. The vote garnered the highest participation rate in union history, it added.
In all, 12 unions representing 115,000 workers stand to ratify a labor agreement with rail companies. The Brotherhood of Maintenance of Way Employees division of the Teamsters, which represents 12,000 members, rejected the tentative agreement earlier this month.
Six unions have ratified the deal brokered by the White House, the NCCC said.
The two largest rail unions -- the Brotherhood of Locomotive Engineers Trainmen, or BLET, and the SMART Transportation Division, or SMART-TD, which make up roughly half of all rail workers -- are set to finish voting in the middle of next month.
The unions that voted down the agreement have vowed to continue negotiations at least until Nov. 19, when a strike could ensue.
"The artery of the US economy is the rail system. It's one of the ways we get everything around. One third of everything gets around this way. And when you cut it, you have a stroke," Diane Swonk, chief economist at global tax firm KPMG, previously told ABC News.
A potential strike could lead to $2 billion a day in lost economic output, according to the Association of American Railroads, which lobbies on behalf of rail companies.
Freight railroads are responsible for carrying 40% of the nation's long-haul freight and a work stoppage could jeopardize these shipments.