A Discussion on the RLA and UPS Campaign

There is a campaign in Washington that threatens the ability of FedEx and its team members to serve our customers.  For the past few months, FedEx Express has been the target of an extensive special-interest lobbying campaign by UPS to have Congress pass legislation to change our status under the Railway Labor Act (RLA).

We are doing everything in our power to fight this effort. Removing FedEx Express from RLA jurisdiction could expose our customers at any time to local work stoppages that interrupt the flow of their time-sensitive, high-value shipments through our global network. Keeping our RLA classification means our customers can count on the reliability of FedEx Express.

Let me explain how this challenge to FedEx evolved.  It all begins with the Railway Labor Act.

The Railway Labor Act
The Railway Labor Act was originally passed by Congress in 1926 to limit economically crippling strikes. The law was a direct response to damaging local strikes that had bottle-necked railroads, the national transportation system of that period, and hobbled the economy.

In time, the law expanded to cover airlines and express carriers. FedEx Express, as an air express carrier with a combined air/ground network, has been accurately covered under the RLA since the company was founded almost four decades ago. The RLA, then and now, offers employees a way to unionize if they choose and engage in collective bargaining while, at the same time, protecting national (now global) commerce from crippling work stoppages. It’s a common-sense balance that benefits all parties.

All employees at U.S. airlines have always been covered by the RLA, and FedEx Express remains an airline-centered operation.  Consider the following:

• The RLA status of FedEx Express has been continually reaffirmed by courts and federal agencies.
• The Ninth Circuit Court of Appeals decided in 1991 that FedEx is the kind of integrated system covered by the Railway Labor Act.  The Supreme Court declined to even hear the case because of the soundness of the ruling.
• In 1996, Congress also reaffirmed that FedEx Express employees were classified properly under the RLA.

Every court or agency that has looked at the issue has ruled that FedEx Express belongs under the RLA.

The RLA and the NLRA
Under the RLA, groups that wish to unionize must do so across nationwide classes of employees. The RLA also requires mandatory government-led mediation of contract disputes supervised by the National Mediation Board before a union can strike or an employer can replace employees or impose contract terms.  Once again, it’s an effort to provide a balanced approach for all involved in the process.

The National Labor Relations Act (NLRA) is another law that governs union organizing and collective bargaining. It is a more general piece of legislation geared to general and local labor situations. The NLRA covers the vast majority of American workers since only a small percentage of people work in national transportation systems. Under the NLRA, employees can unionize in small localized groups, and government led mediation is not a required step in the negotiation process.

UPS and the NLRA
There is a reason UPS is trying to change the regulatory rules now.  They haven’t been able to win in open competition so they are trying to win by lobbying.  Let me explain.

UPS has been under the NLRA since that law was passed in 1935 because they have always been a ground company. When UPS began its airline segment in the 1980s, the employees in that segment, mostly pilots and mechanics, were classified under the RLA – like all other airlines, including FedEx Express. However, UPS does not handle their air shipments in a separate and distinct network that ties directly into their air operation, as FedEx Express does. That’s why their pickup and delivery employees have remained covered by the NLRA. 

Throughout the 1990s, UPS tried to have their drivers reclassified from the NLRA to the RLA. Every time, the independent regulators said no. For example, in 1991, the Ninth Circuit Court of Appeals found that FedEx is exactly the kind of essential, integrated air service the RLA was designed to cover.  In 1996, the U.S. Court of Appeals for the D.C. Circuit found that FedEx trucking services principally serve our air-delivery services whereas UPS’ trucking services do not.  They confirmed that UPS’ non-airline operations were correctly classified under the NLRA.

Only after a decade of failure at that effort did UPS join the Teamsters in trying to reclassify FedEx Express. That is why UPS and the Teamsters are now putting so much time, money and effort into changing the RLA itself.

The UPS Campaign
The UPS lobbying campaign resulted in language being inserted into the House version of the FAA Reauthorization Bill that would alter the status of most FedEx Express employees. That provision is not in the Senate version of the bill at this time. The Senate will likely complete a second version of the bill, and the two versions would then be reconciled into a final bill to be voted upon by both houses of Congress in the coming months.

Here’s where we stand:

• We firmly believe the RLA is the proper classification for our company.
• Unlike our competition, we operate an integrated air/ground network and handle air shipments separately in that network. RLA jurisdiction gives us the best opportunity to deliver reliable, uninterrupted service to customers.
• It is that superior service that has allowed us to grow despite the best efforts of a larger competitor -- UPS. Their current Washington lobbying campaign seeks to gain a competitive advantage they have been unable to achieve through their service performance.
• If we were re-classified, the government would in effect give UPS unfair advantage and jeopardize the reliability of the FedEx integrated delivery network.   Such a change potentially causes major disruptions to commerce and consumers.

FedEx Express has always acknowledged that employees have the right to unionize if they so choose, and respects the laws and regulations that ensure that right. And the RLA does not prevent employees from unionizing—after all, more than 70 percent of employees covered by the RLA are represented by unions.

Of course, FedEx Express does prefer to deal directly with employees, without a third party in between. Our 38-year track record as one of America’s best places to work and best service providers shows that formula works very well for our employees and our customers.

With Congressional deliberations underway, we are doing everything in our power to communicate our position to legislators and to educate our customers, team members, and the public on the importance of our RLA status. The more people know, the more they’ll see that the 20 years of decisions by the courts and the regulators are right and that UPS is wrong.

We will marshal all our resources toward the defeat of any legislation that could so dramatically affect our fast, efficient service to customers.  For more information on the FedEx challenge to the UPS effort, go to brownbailout.com.