FedEx has been in the news over the last month regarding a couple of labor union issues. FedEx is not unionized (except for some of its pilots). UPS is heavily unionized. FedEx wants to remain non-union. UPS wants FedEx to become union. Does UPS think it’s operating at a disadvantage against non-union FedEx? Why else would it so desperately want FedEx to organize? Here’s the skinny on the FedEx labor issues that recently made news.
1. FedEx formed in the 1960s as an airline and thus falls under the 1926 Federal Railway Labor Act, which was designed to limit work stoppages and strikes. UPS, on the other hand, began in 1907 as a trucking company and falls under the regulations of the National Labor Relations Act which permits (if not encourages) work stoppages and strikes. UPS has been working behind the scenes in Washington D.C. to get an amendment to the Federal Aviation Authorization bill which could remove FedEx from the Railway Labor Act and in place it firmly within the confines of the NLRA.
2. FedEx announced that it will consider canceling its plans to purchase up to 30 new Boeing cargo planes if EFCA passes. Remember when Sir Richard Branson threatened to stop buying Boeing planes for Virgin Airlines after the Boeing strike stalled the production of several of his airplanes? And now FedEx may also leave Boeing. Looks like Boeing is suffering the same fate as most every other unionized operations. . . a slow, steady decline in business.
3. FedEx won a court battle after refusing to bargain with a the Teamsters. Specifically, the Teamsters have been relentlessly trying to organize FedEx drivers and actually thought they had succeeded. But FedEx refused to meet with the Teamsters to negotiate a contract, so the Teamsters sued FedEx. The D.C. Court of Appeals ruled last week that FexEx did not have to meet with the Teamsters because those drivers (and many FedEx drivers) are independent contractors, not employees, and thus not eligible to join a union.
Of course FedEx is on the short list, along with WalMart, McDonalds, and Burger King to be organized. In fact, unions even have a FedEx Watchwebsite with anti-FedEx propaganda. For the WalMart Watch website, click here. Unfortunately, all of this union attention has resulted in FedEx stock being downgraded from “peer perform” to “underperform” while the price of the stock went from $120/share a few years ago, to around $50/share now, and an expected continued slide down to around $30/share in the next year.