FedEx riled by pro-union bill language

FedEx CEO Fred Smith said his company’s air cargo business would “stop growing” if Congress passes legislation that would make it easier for the company’s workers to form a union.

A provision that would place FedEx under the same labor law as rival UPS is included in the House-passed version of legislation whose basic purpose is to fund the Federal Aviation Administration.

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The Senate FAA reauthorization bill does not include similar language. Sen. Bob Corker (R-Tenn.), whose home state is also home to FedEx, placed a hold on the legislation until he won assurance that a final bill would not include the labor language.

Rep. Jim Oberstar (D-Minn.), the House Transportation Committee chairman, added the labor provision to the FAA bill. His spokesman said Oberstar has fought for the labor change for the past 10 years.

“Chairman Oberstar wants workers who are doing essentially the same jobs to be treated the same way under labor law,” committee spokesman Jim Berard said.

Berard said Oberstar was “very supportive” and that he would fight to keep the labor provision in the larger FAA bill. 

The bitter lobbying fight has been going on for years, with FedEx on one side and UPS and the Teamsters union on the other.

Smith said the provision could “destabilize” FedEx operations to such an extent that it’s likely the board of directors would respond by reconsidering the $2 billion a year FedEx Corp. invests in its Express operations, its air cargo fleet.

Smith described the Express fleet as highly interdependent, and a work stoppage in one of its “hubs” could halt the delivery of critical goods.

The House FAA bill would allow workers at FedEx Express to organize locally. Currently, workers have to hold a national election to form a union.

FedEx pilots are unionized, but they account for only around 4,500 of the total 125,000 who work in the company’s air cargo operations.

FedEx Corp. also includes a FedEx Ground, FedEx Freight and office supply and copier stores that used to be called Kinko’s.

The air cargo service constitutes the bulk of FedEx’s business.

During a lunch with reporters, Smith repeated a threat the company would reconsider plans to purchase additional 777s if its labor rules change.

Smith said he supports the broader FAA bill but feels confident his company’s supporters could block the bill if it included the labor language the House adopted. If not, he said, the company would likely challenge the legislation in court, arguing that it targeted one company specifically, in violation of the Constitution.

“The bill needs to pass without any extraneous labor provisions,” Smith said of the FAA bill.