Longtime adversaries United Parcel Service (UPS) and organized labor are performing a pincer movement on UPS’s rival, Federal Express, by pressing Congress to make it easier for FedEx workers to form unions.
Beating back the legislation is now the No. 1 legislative priority for FedEx, but it faces a tough environment, given the clout unions have shown they wield with the Democratic-led Congress.
While not working together, UPS and labor groups such as the Teamsters are lobbying hard for Congress to classify a unit of Federal Express — FedEx Express, which handles overnight deliveries — under the National Labor Relations Act (NLRA), which allows workers to organize locally, making it easier to form unions. Overnight deliveries represent the majority of Federal Express’s business.
They have found an ally for their demands in House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.), who included language reclassifying FedEx Express in an amendment to the Federal Aviation Administration (FAA) reauthorization bill, which passed his committee with bipartisan support late last month over FedEx’s objections.
The bill could come up for a floor vote this month.
Oberstar’s amendment was approved in committee by a vote of 51-18, with 18 Republicans voting in favor, which shocked some at FedEx, business lobbyists said. Some said the strong vote reflected the influence of UPS and labor, as well as Oberstar, since many committee members likely did not want to buck their chairman.
FedEx is now focused on fighting the language off in the Senate, where a similar FAA reauthorization bill does not include the labor language. However, UPS has many friends in the Senate, including Minority Leader Mitch McConnell (R-Ky.), whose home state hosts the UPS air hub in Louisville.
Both UPS and FedEx have huge political action committees. UPS gave $3.1 million in the 2005-06 cycle, compared to FedEx’s $2.08 million. Both gave a majority of their donations to Republicans, but FedEx has given a little more than half of its $428,500 in donations to Democrats so far in 2008. UPS has given more than half of its donations this year to Republicans, according to PoliticalMoneyLine.com, which tracks donations.
Rep. Steve Cohen (D-Tenn.), whose district includes Memphis, FedEx’s home city, was the only Transportation Committee Democrat to vote against the Oberstar amendment. He said he had been advised that both labor unions and Oberstar would have long memories, but stated that on this issue he could not side with Oberstar because “FedEx is right.”
The UPS-FedEx fight is rooted in the fact that most UPS workers are covered by the NLRA, while FedEx Express is classified as an air carrier under the Railroad Labor Act (RLA). Workers under the RLA may only organize nationally — a higher hurdle to forming a union. Aside from its pilots, FedEx workers are not unionized, so shifting FedEx Express to the RLA could be a huge victory for organized labor, given the fact that UPS is the largest employer of Teamsters.
Cohen noted that FedEx Express has been under the RLA since its inception in 1973, making it different from UPS, which started out as a trucking company and has always been covered under the NLRA.
Many FedEx subsidiaries are also under the NLRA, including its freight and ground delivery units, although those employees are not unionized. However, FedEx Express is under the RLA.
In 1995, express carriers were moved from the RLA to the NLRA after the Interstate Commerce Commission was sunset. A year later, Congress approved an FAA bill that moved express carriers back to the RLA.
Labor groups call the 1996 move a “sweetheart deal” for FedEx that gives it an unfair advantage over UPS. In a statement, Teamsters President James Hoffa said the advantage had allowed FedEx to “profit on the back of its workers, who have faced slower growth in wage increases, hikes in healthcare costs and the demise of their pension plan.”
FedEx, however, says it was a mistake to move express carriers in 1995 from the RLA, and that Congress merely made a technical correction when it approved the 1996 changes. “The idea that express companies (or more specifically FedEx Express) first became covered by the RLA because of 1996 legislation is simply false,” FedEx Chairman Frederick Smith wrote in a June 25 letter to Rep. Jerry Costello (D-Ill.), who chairs the House Transportation aviation subcommittee.
FedEx also argues that its employees are well compensated, and it highlights lists touting FedEx as one of the best companies to work for. Although there is no certainty that workers at FedEx would form unions if placed under the NLRA, FedEx sees the potential as something that could devastate its business since it could lead to small groups of workers striking, which could disrupt FedEx’s delivery system.
UPS maintains FedEx Express workers basically do the same work as UPS workers and that both should be under the same labor board. “From our viewpoint, this is about employees being treated equally under the law,” said UPS Spokesman Malcolm Berkeley.
Berkeley insisted this isn’t a UPS-versus-FedEx fight. “This is not something that UPS drummed up and is driving,” Berkeley said.
But lobbyists tracking the issue said UPS has been pressing lawmakers to make the change behind the scenes, and that FedEx sees itself as under attack by a rival seeking to injure it. Although FedEx has a revenue advantage over UPS in express-delivery market share, FedEx has been gaining on UPS in ground deliveries, which make up the bulk of the UPS business.
“UPS is attempting to change the rules by harming the competition through legislation,” said David J. Bronczek, president and CEO of FedEx. He said FedEx “thrives” on competition. “We just think it should be done in the marketplace, not the halls of Congress,” Bronczek said.
|
