FedEx, UPS face off over labor-law fix

The fiercely competitive shipping industry has taken its battle to Capitol Hill, but don’t expect the labor-infused fight to be resolved overnight.

FedEx and UPS Inc. are sparring over proposed legislation that would make it easier for FedEx employees to unionize, potentially upsetting the balance of power between the shipping giants.

FedEx, the No. 2 delivery company behind UPS, fears it would lose a vital competitive advantage with a Teamster trucking union work force and is desperate to avoid the kind of Teamster-led strikes that caused UPS management headaches in the 1990s.

“We are an airline; they are a trucking outfit,” said FedEx spokesman Maury Lane. “You can’t put stop signs at 30,000 feet.”

Eighty-five percent of FedEx packages are shipped by air, while 85 percent of UPS’ go only by truck.

However, Congress is considering a change in labor law that would allow FedEx Express drivers to unionize under the National Labor Relations Act, the same law that governs UPS. FedEx Express, the company’s airline division, is governed by the Railway Labor Act, which makes unionizing more difficult.

Supporters of the measure — including UPS — say it would close a legal loophole that makes FedEx the only company of its kind allowed to classify package-delivery workers under the railway act. If the proposal were enacted, the Teamsters would be allowed to represent FedEx Express drivers for the first time.

Ironically, the debate has paired UPS and the Teamsters on the same side. Both say the issue is a matter of fairness and that the legislation would correct a mistake that has allowed FedEx to misclassify thousands of workers.

“These are two companies that are the same,” said Ken Hall, vice president and director of the Teamsters’ package division. “If it weren’t for the color of their uniforms, no reasonable person would be able to tell the difference.”

UPS spokesman Malcolm Berkeley added that “a driver is a driver is driver — they all should be treated fairly.”

UPS, which has lobbied hard for the bill’s passage, also is eager to see its main competitor forced to deal with the powerful Teamsters — a scenario it hopes would increase costs and generally make life more difficult for UPS’ main rival.

Mr. Lane agreed that letting the Teamsters represent company drivers “would cost FedEx the ability to be reliable.”

Both companies have lobbied Congress and the public extensively. Though neither company will say how much money it’s spending on fighting the issue, similar battles over union-related legislation have cost several million dollars.

FedEx is running with a public-relations campaign that portrays the legislation as a de facto government handout for UPS. To boost its case and capitalize on the public outrage over taxpayer money recently spent to rescue Wall Street, FedEx has tagged the bill a UPS “bailout” in an effort to kill it.

“Let’s be honest — this is a legislative bailout for UPS,” Mr. Lane said. “When your business is unreliable, you can build up your operations or tear down your competitor’s, and they have chosen to tear down their competition.”

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