Is FedEx playing fair?

Brian Straight June 17th, 2009

It’s now been more than a week since Federal Express launched an advertising campaign against UPS, calling language in the FAA reauthorization bill a “bailout” for Big Brown. The company even started a web site, brownbailout.com, which has received hundreds of comments, and no doubt, thousands of hits, to set the record straight on the issue – at least according to FedEx’s interpretation.

In essence, the bill would reclassify FedEx Express under the National Labor Relations Act (NLRA) instead of its current classification under the Railway Labor Act (RLA). The big difference is that under the NLRA, unions can be set up in individual facilities as opposed to system-wide unionization which is required under the RLA.

UPS is under the NLRA and is heavily unionized by the Teamsters, who, as one can imagine, are not happy they have been unable to unionize FedEx Express. This change, according to some, would make it easier for that to happen.

FedEx head Fred Smith, of course, is opposed to this. Unions raise costs, can disrupt productivity through use of strikes in cases of labor disagreements, and keep management on edge. Smith doesn’t want that.

Now I have opinions on unions, with no disrespect intended to any union out there. In many cases, unions have been positive for the American worker. There was a time when unions were the only way for workers to receive fair wages, safe working environments and job security. I’ve also seen times when unions’ unwillingness to work with companies that legitimately needed the help spelled doom, costing thousands of jobs – the very jobs they were trying to protect.

I don’t know the exact situation with FedEx, but looking from the outside, it seems that if the company is so concerned with the possibility of unionization, then maybe the employees are not being treated fairly. While this is easy to say from where I sit, if the employees are truly happy with their working conditions, pay, benefits, et al, then a union vote would be a simple “No.” Any other vote would indicate unhappiness of some level.

The other issue is the use of the term “bailout.” This is in no way a bailout of UPS as we’ve become accustomed to. Banks have been given bailouts. The automakers have been given bailouts. UPS, not so much. As far as I know, the government will not be giving UPS any money in this deal. For FedEx to use the term bailout is questionable judgment, at best. I wonder how many people will rebel against FedEx for what they may deem a mistruth.

In the end, if FedEx spent a little of the money it’s spending on this ad campaign on the employees, it would have nothing to worry about.

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Related Topics: Trucking Regulation, Trucking

7 Comments to “Is FedEx playing fair?”

1. Mike hello Says:
   

   June 17th, 2009 at 3:18 pm

   Mike,

   As an award winning journalist it strikes me odd that you would write an article and give opinions when you admit you don’t have all the facts. Let me give you some facts and see then get an opinion from you. First of all, in this economy, with people getting laid off daily, Why would our government would consider this type of change, that would cost a company (not just FedEx but any company) money when companies are trying to survive is just plain stupid especially when FEDEX Express has been under NRA for 36 years –Does this really have to be now? more layoffs! Also this does apply to FEDEX Express only not sure if you know that! Also this will make it where a local facility joins and can disrupt the delv service and force people that do not want a union. The majority of FedEx Express do not want a union thats why they have not organized under the NRA. Do you also realize the person that created this bill and is pushing for this Congressman James Oberstar or Jim receives campaign donations from The Teamsters–this is public record so you can look this fact up. So this makes you wonder is this the reason and this is the why now urgency. The urgency is so the small group that wants the union can override the majority vote and we can stick it to another company is this economy and give the Teamsters control over the National Commerce.

   We all know what unions have done for this country but there has not been any type of regulation or change to the unions since the 1950’s. but they have changed–they are now a business that provides income and pensions to many and in this economy they are losing business –ding ding –here is FedEx Express–more money. Have you ever noticed how they never take a union due pay cut — when the labor workers salaries or hours get reduced.

   Now Brian thats just a few facts some opinions please

2. en romero Says:
   

   June 17th, 2009 at 3:56 pm

   After reading this there is certainly a lot of confusion and misinformation about this.

   Consider these points:

   NLRA already covers some FedEx operating companies…
   FedEx LTL operating companies are already under the NLRA. It makes sense given they are a wholly owned end-to-end trucking network.

   Differences…
   FedEx Express is the largest Airline in the world that uses trucks for it’s pick up and last leg. FedEx Ground is a franchised delivery service.

   The Ground Corporation only owns the line-haul, which is the smallest portion of the business, the rest is entirely independently owned.

   Unlike both of these operating companies UPS is the largest end-to-end trucking company in the world. UPS owns every part of their network and is a true trucking company.

   Who benefits….
   Who, other than UPS or the Teamsters, benefits by putting the largest Airline in the World under the NLRA?

   Teamsters…
   Does anyone remember what happened between August 4th and 19th of 1997 when the Teamsters strike shut down UPS. It crippled the country and people were throwing packages over the fence at FedEx stations hoping that their packages would be delivered.

   Should NLRA be imposed on FedEx the Teamsters will make unionizing FedEx a top priority. Should unionization efforts not succeed at first they will keep their unionized drivers from filling open positions at FedEx.

   What’s next…
   If the NLRA incorporates Airlines and Franchised businesses what’s next? Will it go after ocean freight just because they too offer delivery from the port to the final leg using a truck?

3. Andy Norton Says:
   

   June 18th, 2009 at 7:36 am

   Brian, Thanks for digging into this story and uncovering the truth. Here are a few more facts that you won’t find on the FedEx site:
   1. UPS and FedEx both deliver approximately 2.5 million express packages each day. FedEx’s claim that UPS ships 85 percent of its goods by truck is false. FedEx’s claim that only 6% of all UPS drivers carry express packages likewise is false; the correct number is 95%.
   2. FedEx currently has more than 100,000 NLRA-governed employees who are not unionized. Yet, the company is trying to convince the U.S. Congress and customers that amending the RLA will increase its labor costs. FedEx’s history doesn’t demonstrate that its NLRA-governed employees will be unionized. In fact, the only unionized FedEx employee group is its cadre of RLA-governed pilots.

   The bottom line is shouldn’t the same law govern the same jobs?

4. Donna Longino Says:
   

   June 18th, 2009 at 10:37 am

   As a UPS employee, it’s been intereesting to watch FedEx spend a lot of money to convince people — including the U.S. Senate — that its packages are delivered by airplanes. Anyone had a FedEx or UPS airplane pull up to your home or place of business recently to drop off a package? Packages — whether they’re ground or express packages — are delivered by drivers, not pilots. So, why should FedEx be the ONLY company in the express delivery industry whose truck drivers aren’t governed by the NLRA? Why the special legal treatment?

   Same jobs should be governed by the same labor laws. That’s a basis for FAIR competition in the marketplace. The marketplace — a level playing field of fair competition — should determine success, not the unequal application of labor laws.

   Check out the other side of the story at: http://pressroom.ups.com/landing/0,2111,101,00.html

5. MARK MARK Says:
   

   June 19th, 2009 at 2:45 pm

   Let us clear up a couple of items:
   This legislation aims to level the playing field in the express delivery industry by placing all FedEx Express’ drivers and other non-airline specific employees under the appropriate labor statute – the NLRA.

   All of FedEx Express and part of UPS are governed by the RLA due to airline operations. Because FedEx Express originated as an airline, all of the company’s drivers and other non-airline specific employees are governed by the RLA, even though most of its employees drive trucks and sort packages and do not perform airline-specific functions.

   By comparison, similarly situated employees at UPS and all other express delivery companies are governed by the National Labor Relations Act (NLRA), which enables certain employees to unionize at the local level.

   FedEx Express is the only delivery services company in the nation with its delivery drivers, package handlers, and sorters—positions not specific to airline or railway operations—covered under the RLA.
   UPS supports a “same job, same law” approach, meaning that employees who perform the same tasks and job functions at different companies are covered under the same laws.

   UPS was originated as a trucking company, our drivers and package handlers are covered by the NLRA as are all other workers of thousands of trucking companies. This inconsistent classification of FedEx Express, creates an unfair playing field and competitive advantage for the company. FedEx uses this unfair advantage to pursue UPS customers each time UPS negotiates a contract with a union that represents its employees. FedEx also makes the point that it can’t be unionized due to this imbalance in labor laws to win customers.

   Amending the RLA corrects this anomaly by applying the same labor law to employees performing the same functions at different companies.

   UPS delivers approximately the same number of express packages in the United States daily as FedEx. FedEx’s threats of increased consumer prices, limited competition, canceled aircraft purchases, and diminished global trade are part of their strategy to preserve their current legal preference.

   Moving the appropriate FedEx Express employees to the NLRA will not automatically expose their system to increased labor disruptions, limited competition, increased costs, or diminished global commerce. The proposed legislation would simply put the same jobs under the same law.

6. Rex Patton Says:
   

   June 20th, 2009 at 11:22 pm

   Actually the writer of this blog seems very well informed. This is a very common sense issue. FedEx express doesn’t want their employees to have the oppurtunity to Unionize so they are fighting this by distorting the facts.If someone doesn’t like Unions that’s one issue but saying that FedEx express is still an airline is completely different.Instead of running a smear campaign against a competitor it would seem like FedEx should invest those resources into showing it’s employees that they don’t want to Unionize because FedEx express is comparable to a Union job. The big problem for FedEx is that they can’t do that so a smear campaign appears to be their only option.Kudos on the article you completely nailed the issues Brian.

7. Patricia Caparoula Says:
   

   October 19th, 2009 at 9:12 pm

   I’ve worked for FEDEX for the past 26 years and I can tell you this much. It isn’t about having a union or not. It’s all about respect for others which I haven’t seen in a long time. The managers at my station talk and talk and talk about changes but nothing ever happens. More and more work which can be done but without conversation between co-workers and managers we never know what we are doing but are held accoutable for our numbers along with everything else. Why are the managers not help accountable.
   I would love the opportunty to have a one on one conversation with Fred Smith.
   We need structure at our station or I’m afraid someone is going to get hurt.
   Anyone is welcome to visit our station to get a hands on look at the mess it has become.

   Union is the least of my concerns…..

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