Senate passes FAA funding bill without provision changing FedEx's labor status

The Senate late Monday passed a funding bill for the Federal Aviation Administration (FAA) that would not force FedEx Corp. to change the labor law classification that governs workers at its air express unit.

The Senate bill, which funds FAA operations through the end of the 2011 fiscal year, must now be reconciled with an earlier version that passed the House of Representatives last May. The bill passed by the House would require that workers at FedEx Express who aren't involved in airline operations and maintenance be governed by the National Labor Relations Act (NLRA), a law that covers workers in the trucking industry. Currently, all of FedEx Express's workers are governed by the Railway Labor Act (RLA), which covers workers in the airline and railroad industries.

The Senate action was widely expected. The two senators from FedEx's home state of Tennessee, Republicans Lamar Alexander and Bob Corker, had opposed any language in the Senate version changing FedEx's labor classification.

FedEx has accused arch-rival UPS Inc. of orchestrating a legislative effort to force FedEx to change the classification for air express workers. Operations at UPS, which is heavily represented by the Teamsters union, are governed by the NLRA.

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. Other than its pilots, FedEx has been largely non-union since its founding in 1972, and it wants to remain that way. The Teamsters, meanwhile, would covet a foothold in the FedEx Express operation.

FedEx has warned that representation under the NLRA would give unions the power to call job actions within a city or a region, creating a ripple effect across the FedEx network and leading to delays of time-sensitive deliveries to and from the affected area. UPS argues that workers like drivers and sorters not directly involved in airline operations should be covered under the same law that governs ground service workers at other companies.

In a statement, FedEx applauded the Senate for rejecting "efforts to include an ill-conceived 230-word bailout provision inserted by UPS lobbyists into the House bill that would change how FedEx Express has been regulated since its founding 38 years ago." UPS issued a statement applauding the Senate for moving forward on FAA funding, but made no mention of the labor issue.

Currently, FAA operations are being funded through a 90-day extension of current programs that expires on June 30, 2010.