Labor Pains: Because Being in a Union can be Painful

FedEx Vs. UPS

The media has started to take note of the brewing battle between delivery competitors FedEx and UPS.

FedEx kicked off a campaign to drum up opposition to a UPS-backed provision in the FAA Reauthorization Act that would change current labor law for FedEx workers, making it easier for workers to unionize.

The majority of FedEx workers are currently subject to the Railway Labor Act (RLA) because FedEx was orginally started as an airline. The RLA was passed in 1926 to prevent interruptions to national rail traffic. The RLA requires a national vote by every worker to unionize. This does not allow organizing at a local level. UPS, and more importantly, the Teamsters, have been trying to change this since the 1990s.

UPS and the Teamsters want to remove most of FedEx’s workers from the jurisidction of the RLA and put them under the National Labor Relations Act (NRLA).  This of course would make it easier for unions to organize FedEx workers. UPS claims that this will put FedEx on the same footing as UPS.

FedEx opposes this measure, arguing that it will impair their delivery system’s dependability and raise the cost of shipping for customers. A FedEx spokesman argued that this type of legislation amounts to a bailout:

“This effectively bails UPS out because they entered a bad labor agreement. …They want Congress to fix a labor agreement they can’t afford.”

The bailout concept is the basis of FedEx’s campaign, which debuted an online ad today:

FedEx’s campaign, dubbed “Brown Bailout,” debuted June 9 online and could be followed by television and print ads. The company wants consumers to complain to their senators about the legislation. On, the FedEx campaign’s Web site, a man in front of a whiteboard describes “getting a government bailout” in a manner similar to UPS’ “Brown” marketing campaign. After stating that UPS is struggling to compete with FedEx, which ships a higher percentage of its parcels by air, the man says, “So what do you do? Well, you could try to improve your own business…well, that’s hard work. Instead, how about slipping a few words into an important government bill that gets you a bailout?” He uses his marker to turn the S in UPS into a dollar sign. “We’re doing it right now, but shhh…don’t tell anybody.”

The FedEx vs. UPS battle is a two-fold example of unions’ power and influence: 1) unions are able to exert control over the policy-making process and 2) unions entrap a company (in this case, UPS) and ultimately decide its business operations and model.

Much has also been made of UPS being a successful unionized company. It’s hard to imagine that a truly successful unionized company would  resort to writing laws that increases the cost for another business.

Categories: Center for Union FactsEFACNews