Forwarded by Joseph Horgan, former HQ staff

UPS seeking change in union organizing rules

Atlanta Business Chronicle - July 20, 2007
by John Manasso
Staff Writer

From United Parcel Service Inc.'s perspective, the Atlanta-based
delivery company is lobbying Congress to level the playing field.

From the perspective of competitor FedEx Corp., UPS is looking for a
"legislative bailout."

At issue is an amendment to the Federal Aviation Administration
reauthorization bill that would alter the way in which FedEx Express
employees are able to unionize.

Currently, FedEx Express employees are governed by the Railway Labor
Act (RLA), which says that railway and airline employees can only
unionize nationally. UPS is governed by the National Labor Relations
Act (NLRA), which allows employees to unionize locally -- a less
complicated enterprise. As a result, UPS is the nation's largest
employer of Teamsters workers.

The House Transportation and Infrastructure Committee, chaired by Rep.
Jim Oberstar, D-Minn., recently passed the amendment on June 28 by a
vote of 51-18.

"Both are about the same business," committee spokesman Jim Berard
said. "They came to where they are from two different directions.
FedEx started as a cargo airline and UPS started as a ground-based
service, a trucking company. ... They operate very similar operations
and provide very similar service and should be treated the same under
the law."

UPS said it is pleased with the committee vote.

"From our perspective, we support the legislation because we think it
levels the playing field that should be leveled," UPS spokesman
Malcolm Berkley said. "... Our position and the people who support it
is that it's not how companies are structured, it's the jobs that
people perform."

FedEx is organized in four groups: freight, home delivery, ground and
express. Out of those four groups, only the express business is not
governed by the NLRA.

"We've always felt [we] built this company customer by customer, not
by a legislative bailout that gives you market advantage," FedEx
spokesman Maury Lane said. "They have the same opportunity to operate
the same way as we do, but they chose a different business model and
now they're trying to pull us down into their decisions that make it
more difficult to operate our express business as efficiently as we do."

FedEx believes its different business model should make a difference
under the law.

"They don't do the same work," FedEx's Lane said. "Our express drivers
deliver express packages that move on airplanes, so they should be
governed rightly under RLA. [UPS has] truck drivers and flown packages
together. It's a mixture of apples and oranges for them. It's just
apples for us."

In 1995, express carriers had their status changed from the RLA to the
NLRA, but Congress changed that the following year. In its defense,
FedEx cites a ruling by the 9th U.S. Circuit Court of Appeals in a
1991 case involving FedEx -- then Federal Express -- and the
California Public Utilities Commission.

The court ruled: "The trucking operations are not some separate
business venture; they are part and parcel of the air delivery system.
Every truck carries packages that are in interstate commerce by air.
... Because [Federal Express] is an integrated system, it is a hybrid,
an air carrier employing trucks."

UPS' Berkley resisted characterizations that UPS is "driving" the
legislation. Regardless, it does put UPS in the interesting position
of supporting the same legislation as the Teamsters.

"If someone asks our opinion, we're letting them know," Berkley said.
"We're one of many people who have been actively letting people know
our position. Have we been lobbying this position? Absolutely. But no
more or no less than anyone who has something invested in this."

The bill still has numerous hurdles: It must pass the full House of
Representatives, the Senate and be signed into law. Thus, FedEx still
has other recourses available, but it must overcome the fact that the
amendment passed with strong bipartisan support.

The full House is expected to take up the bill before its recess
begins on Aug. 3. The Senate also is working on its own bill. The two
houses would have to reconcile any differences before Sept. 30, when
the fiscal year ends.

"The legislative process is long," Lane said. "It takes many turns ...
There is a lot of legislative ground to be plowed."

As to any adverse effects this proposed change to the law might have
on FedEx's business, Lane responded: "They've been in business for 100
years and we've been in business for more than 30. They could have set
the company up the same way as we did."