Sunday, July 19, 2009

FedEx, UPS and the Teamsters.

The House of Representatives has recently passed a bill which could make it easier for employees of Federal Express to unionize. In previous attempts to do so, FedEx drivers have overwhelmingly supported the idea, but have been knocked down by the courts. One reason they face difficulty in collective bargaining is the driver’s classification as independent contractors, but another is the classification of the Federal Express corporation as an airline, which determines which labor laws they are obliged to follow and what rights their employees have.

Federal Express started off as an airline because their original service was strictly air transportation of packages, and is therefore governed by the Railway Labor Act, which covers air transportation in addition to rail, and that makes it more difficult for it’s workers to unionize then that of it’s rival, UPS, which began as a ground transportation service. Congress is currently considering legislation which would make it easier for FedEx employees to unionize by transferring government oversight to the National Labor Relations Act, which is what controls UPS. The reason it is more difficult to unionize under the RLA is because support for a union in that case must come from all eligible employees across the nation, not just those who would show up to vote, a very difficult requirement to achieve under any circumstance. This requirement was probably put in specifically to avoid an economically damaging strike in the rail industry.

It is no surprise that UPS supports this legislation, and FedEx opposes it. The reasons for each are simple, so long as UPS is unionized and FedEx isn’t, UPS’s operating costs are considerably higher, a situation that UPS argues gives FedEx an unfair business advantage. As a result of collective bargaining, UPS union employees receive better wages and benefits. It should be noted that UPS itself treats its non-union employees differently then its union ones. The union employees receive higher wages and better benefits then the non-union ones; and the promotion process is strictly by seniority for union covered positions, while it is open to competition for the others, which includes competition from applicants outside of the company.

FedEx has launched a campaign comparing the legislation to a government bailout for UPS. Their efforts can be seen at this website: brownbailout.com. Their accusation is ridiculous, and as far as I can see, nobody seems to be buying it. I suspect that most of the traffic to the website is by those who would mock it. They’re also threatening to back out of a multi-billion dollar contract with Boeing if the bill should pass, which is being viewed by many as a sort of economic blackmail.

When contemplating whether to support this bill, Congress should first consider what it would mean to American consumers if FedEx employees unionized. The company’s operating costs would certainly go up, thereby cutting into their profits. Of course, it is understandable why upper management would not want this. But it is unlikely that they would pass this loss on to consumers, since pricing is already comparable to UPS prices, and it’s my opinion that corporations always charge as much as the market will bear. Secondly, a consideration of what the consequences to American workers would be is in order. By the nature of the business, FedEx will not be able to ship these jobs overseas, since the workers need to be physically located locally in order to get the work done. So no large scale job loss is impending.

Since economic conditions will not be effected by unionization, the public at large has very little stake in how this turns out. Profitability between the two corporations is an in-house problem, and of little concern to the general population. So the only large group with any real stake in this issue is FedEx employees, and it should be their voice that should be given the highest priority. It doesn’t take a genius to figure out where they probably stand on this. I was unable to find any independent polling on FedEx employees about this subject (the internal FedEx poll doesn’t count,) nor did I find any media interviews with them; but I did notice that the comments sections of the news stories about this were filled with people claiming to be FedEx employees who were overwhelmingly in favor of unionizing. The most often cited reasons were fear of being fired without good cause and lack of a satisfactory pension plan. The media is covering the big voices here, meaning the spokespeople for the two corporations and the Teamster’s union, but are ignoring the very people with the biggest interest in the passage of the bill.

The FAA Reauthorization Bill has now moved on to the Senate. If the lopsided passage in the House is any indication, it should pass easily.

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