FedEx wins reprieve in Senate bill

Senate Democrats have spared Federal Express, for the time being, from a labor-backed provision that would give a big boost to its rival, the United Parcel Service (UPS).

The Federal Aviation Administration (FAA) reauthorization bill being debated on the Senate floor does not include language that would make it easier for unions to organize workers at FedEx.

{mosads}While FedEx has won a reprieve, the fight is not over. Democratic aides and labor union officials say they will try to insert the controversial provision into the final version of the bill during House and Senate negotiations later this year.

Last year, the House passed an FAA reauthorization bill that would erase FedEx’s more favorable treatment under labor laws. The House version also included another union-backed provision that would force the FAA to bring a labor dispute with air traffic controllers to immediate arbitration.

The Senate has also addressed the dispute between the FAA and air traffic controllers, but in softer language. It would not require immediate arbitration between the two sides, according to a labor official familiar with the Senate bill.

An FAA spokeswoman declined to comment on pending legislation.

The higher-profile fight, however, is between UPS and FedEx, two companies that have come to dominate the overnight-delivery market. Along the way, both companies have developed significant political clout.

UPS led all corporations in political action committee giving during the 2006 election cycle. FedEx ranked close behind at No. 3 on the list of biggest corporate givers.  

Publicly, UPS is keeping its distance from the FAA debate — but its lobbyists would love to see the measure enacted into law because it would wipe out a big advantage enjoyed by FedEx. Only a fraction of FedEx’s more than 290,000 employees and independent contractors belong to unions, while more than half of UPS’s 425,000 employees are unionized.

“This is not a UPS bill,” declared Malcolm Berkley, spokesman for UPS.

FedEx officials do not expect their rival to press for a vote on labor rules during Senate action this week, but they are keeping their eyes trained for any sudden moves.

“Hundreds of thousands of small, medium and large businesses depend on the more than 3 million packages we deliver by air each day to keep their businesses operating and financially stable,” said Maury Lane, director of issues and crisis management at FedEx. “Any amendment that threatens that exchange of commerce should be considered on legislation where those issues can be more carefully debated and scrutinized.”

UPS workers are covered by the National Labor Relations Act (NLRA), which allows workers to organize locally. This allows unions to form more easily.  

Many FedEx subsidiaries, including its freight and ground delivery units, also are covered by the NLRA. But not FedEx Express, the FedEx unit that handles overnight deliveries.

Because FedEx started out as an airline, FedEx Express is covered by the Railroad Labor Act (RLA), which only allows unions to organize on a national basis. Because airlines tend to ship a higher percentage of goods across state lines, Congress saw an interest in preventing local unions from disrupting interstate commerce.

FedEx Express and other express carriers were moved to the NLRA in 1995 with the sunset of the Interstate Commerce Commission, but Congress passed a law one year  later that moved express carriers back to RLA. Labor groups criticized the move as a “sweetheart deal” for FedEx that gave it an unfair advantage over UPS.

House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) and his union allies argue that it is now time for both companies to operate under the same labor rules.

Lobbyists representing FedEx, however, say this would impose a huge financial burden on the company and could threaten to eliminate, through merger or bankruptcy, one of the last express companies around.

The enmity between Oberstar and FedEx founder Frederick Smith is well-documented. Smith once complained about Oberstar’s rude treatment after the chairman arrived nearly an hour late for a meeting and then cut Smith off after only a few minutes of discussion.

Oberstar has made clear to friends and foes alike that he is intent on passing rules that would make it easier for FedEx workers to unionize.

“I know he’s committed to it,” said Fred McLuckie, legislative director for the Teamsters, which has tried to organize FedEx employees.

McLuckie said union officials did not expect Senate Democrats to include the FedEx language in the Senate version of the FAA bill because such a move could derail the legislation. He and other union officials said that Senate Democratic leaders want to bring FedEx into line with UPS but will wait until later in the year to force a vote on the issue.

“We expect to prevail,” said McLuckie.

Ed Wytkind, president of the Transportation Trades Department of the AFL-CIO, said labor leaders were not disappointed in Democrats for sidestepping a fight over FedEx this week.

“It’s not a question of disappointment,” said Wytkind. “We’re pushing very hard to give FedEx employees the same opportunities UPS employees have always enjoyed.

“We’re pushing very hard that it gets into the bill when they reconcile the House and Senate versions.”

Labor strategists believe that it will be more difficult for Republicans to vote against the FedEx provision if it is included in the FAA bill that emerges from conference negotiations because that would mean also voting against an array of other reforms intended to improve the aviation industry.

They believe President Bush would face similar pressure to sign the bill into law.

“The question is: If we prevail in conference, is this something Republicans fall on their swords for?” said McLuckie. “Would they veto an entire FAA bill over a provision we think is justified and fair? That remains to be seen.”