July 6, 2011

Teamsters launch organizing effort at FedEx Freight

Battle pits union against company's powerful CEO.

By Mark B. Solomon

The Teamsters union has begun a campaign to organize workers at FedEx Freight, the less-than-truckload division of transport giant FedEx Corp., a move that will pit the venerable union against FedEx Chairman and CEO Frederick W. Smith, one of the most formidable anti-union executives in America.

The announcement came July 1 at the union's annual convention in Las Vegas, and was made by Ken Hall, head of the Teamsters' small-parcel division. According to a transcript of Hall's comments, the organizing effort will begin in the West, and the union has three full-time organizers working to solicit interest among FedEx Freight employees. FedEx Freight, the nation's biggest less-than-truckload (LTL) carrier, employs about 30,000 people. It is unclear how many workers would be eligible to be organized.

Teamster spokesman Galen Munroe confirmed today that the union has allocated resources to the effort. A resolution posted July 1 on the Teamster web site states that it "will assist our FedEx Freight brothers and sisters in organizing and achieving their goal of a union contract."

At the convention in Las Vegas, Teamster Vice President Randy Cammack, who is involved in the organizing effort, had harsh words for Smith, saying he runs the "Wal-Mart of the trucking business," and that he's already started a "serious anti-union campaign" to discredit the Teamsters. A FedEx spokesperson did not return an e-mail requesting comment.

The organizing move comes at a critical juncture for both FedEx Freight and the Teamsters. On Jan. 31, FedEx Freight merged its national and regional units into a single operation in what has been its biggest system revamp to date. Late last month, it reported its first profitable quarter after six consecutive quarters of operating losses.

The Teamsters, meanwhile, last week completed the nominating process to determine the union's next general president. General President James P. Hoffa, vying for a third-term, captured 82 percent of the 1,800 delegate votes. His opponents, Alexandra (Sandy) Pope and Fred Gegare, each captured 9 percent of the vote.

The Hoffa campaign said the results give their candidate positive momentum heading into the campaign. His opponents argue that the outcome of the balloting at the convention often has no bearing on the actual election. Ballots will be distributed in October and counted in November.

In trying to organize workers at FedEx Freight, the union will try to go where no union has gone before. For decades, different labor groups have tried to organize ground workers at FedEx, with no success. Efforts to organize workers at FedEx Ground, the company's ground parcel unit, have been thwarted in part by various court rulings upholding the company's argument that drivers at the unit should be classified as independent contractors and not company employees. Such distinctions make it virtually impossible for any union to gain traction at FedEx Ground.

Currently, only pilots at FedEx's FedEx Express unit are union members. Those workers represent a very small fraction of the company's overall labor force.

FedEx's Smith has long believed that third-party bargaining units like the Teamsters are irrelevant at an organization where wages and benefits are considered fair, and where employees have adequate mechanisms at their disposal to address grievances.

Several months ago, Smith won a major battle on Capitol Hill when Congress agreed to drop a provision in the House of Representatives that would have required FedEx workers to be governed under the National Labor Relations Act (NLRA) instead of its traditional status under the Railway Labor Act (RLA), the law that covers labor relations in the railroad and airline industries. The NLRA, which permits workers to be organized at a local, terminal-by terminal level, is considered a much easier path to unionization than the RLA, which requires that workers at a company be organized as a single unit.

Smith had warned that FedEx would scrub a multi-billion order for Boeing 777 freighter aircraft had the reclassification become law.

The announcement came July 1 at the union's annual convention in Las Vegas, and was made by Ken Hall, head of the Teamsters' small-parcel division. According to a transcript of Hall's comments, the organizing effort will begin in the West, and the union has three full-time organizers working to solicit interest among FedEx Freight employees. FedEx Freight, the nation's biggest less-than-truckload (LTL) carrier, employs about 30,000 people. It is unclear how many workers would be eligible to be organized.

Teamster spokesman Galen Munroe confirmed today that the union has allocated resources to the effort. A resolution posted July 1 on the Teamster web site states that it "will assist our FedEx Freight brothers and sisters in organizing and achieving their goal of a union contract."

At the convention in Las Vegas, Teamster Vice President Randy Cammack, who is involved in the organizing effort, had harsh words for Smith, saying he runs the "Wal-Mart of the trucking business," and that he's already started a "serious anti-union campaign" to discredit the Teamsters. A FedEx spokesperson did not return an e-mail requesting comment.

The organizing move comes at a critical juncture for both FedEx Freight and the Teamsters. On Jan. 31, FedEx Freight merged its national and regional units into a single operation in what has been its biggest system revamp to date. Late last month, it reported its first profitable quarter after six consecutive quarters of operating losses.

The Teamsters, meanwhile, last week completed the nominating process to determine the union's next general president. General President James P. Hoffa, vying for a third-term, captured 82 percent of the 1,800 delegate votes. His opponents, Alexandra (Sandy) Pope and Fred Gegare, each captured 9 percent of the vote.

The Hoffa campaign said the results give their candidate positive momentum heading into the campaign. His opponents argue that the outcome of the balloting at the convention often has no bearing on the actual election. Ballots will be distributed in October and counted in November.

In trying to organize workers at FedEx Freight, the union will try to go where no union has gone before. For decades, different labor groups have tried to organize ground workers at FedEx, with no success. Efforts to organize workers at FedEx Ground, the company's ground parcel unit, have been thwarted in part by various court rulings upholding the company's argument that drivers at the unit should be classified as independent contractors and not company employees. Such distinctions make it virtually impossible for any union to gain traction at FedEx Ground.

Currently, only pilots at FedEx's FedEx Express unit are union members. Those workers represent a very small fraction of the company's overall labor force.

FedEx's Smith has long believed that third-party bargaining units like the Teamsters are irrelevant at an organization where wages and benefits are considered fair, and where employees have adequate mechanisms at their disposal to address grievances.

Several months ago, Smith won a major battle on Capitol Hill when Congress agreed to drop a provision in the House of Representatives that would have required FedEx workers to be governed under the National Labor Relations Act (NLRA) instead of its traditional status under the Railway Labor Act (RLA), the law that covers labor relations in the railroad and airline industries. The NLRA, which permits workers to be organized at a local, terminal-by terminal level, is considered a much easier path to unionization than the RLA, which requires that workers at a company be organized as a single unit.

Smith had warned that FedEx would scrub a multi-billion order for Boeing 777 freighter aircraft had the reclassification become law.

About the Author

Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

More articles by Mark B. Solomon

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