Shipping giant FedEx just launched a multimillion-dollar marketing campaign against a congressional measure that would close a legal loophole that exempts the company from complying with the labor rules that govern all its competitors.
Of course, FedEx doesn’t have much of a defense for its special labor arrangement. So the company claims that the measure, which would make it easier for certain FedEx employees to unionize, amounts to a government bailout of rival UPS.
That’s a bit rich—particularly because FedEx has been on the receiving end of a federal bailout of sorts for over a decade. It’s time for Congress to put an end to FedEx’s legal charade and treat all workers in the package-delivery market fairly.
FedEx’s preferential labor arrangement dates back more than a decade. In 1996, the company quietly lobbied for its employees to be governed by the Railway Labor Act (RLA), which requires workers to organize nationally, rather than locally. This poses an enormous logistical and financial challenge to ordinary workers. FedEx’s competitors, by contrast, were bound by the National Labor Relations Act (NLRA), which permits workers to organize locally.
As a result of this rank political favoritism, FedEx has enjoyed a competitive advantage over other freight and package companies.
Its employees, on the other hand, have paid a steep price. Effectively barred from organizing to demand the same fair wages, benefits, and pension plans enjoyed by their peers, FedEx’s workers have been forced to watch as their employer spent millions to protect its congressionally-authorized labor loophole.
Indeed, FedEx has a long and ugly history of violating workers rights. It has often unjustifiably designated employees as “independent contractors” in order to avoid providing benefits and has routinely failed to pay Social Security, workers’ comp, overtime pay, and state withholding taxes.
FedEx’s rap sheet may soon include blackmail, too. In March, the company threatened to cancel a $7.5-billion deal for the purchase of several Boeing aircraft if Congress closed its labor loophole and classified its workers the same way its industry peers did.
Lawmakers should call FedEx’s bluff. A regulatory filing shows that the company has already made $543 million in deposits on the airplane purchases. It’s doubtful that FedEx’s investors are willing to lose millions of dollars so that company managers can extort concessions from policymakers by holding thousands of aerospace workers hostage.
The time has come to put an end to this chicanery. Common sense would dictate that FedEx employees be treated the same as their peers at other package-delivery companies. That means ending the special treatment for FedEx and granting the company’s workers the right to organize—absolutely, positively overnight.
Richard P. Michalski
IAM General Vice President
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