Shift To National Labor Relations Board Now Being Debated
Claiming a possible shift in union representation could
negatively impact its future operations, this week FedEx Corp. said
if legislation is passed to allow unions in to the company, FedEx
would be forced to cancel a large order for Boeing's 777
Freighter.
The Wall Street Journal reports the cargo hauling giant has a
stipulation in its contract with Boeing for up to 30 777
Freighters, noting the company has the right to pull out of the
deal should the company be forced to comply with a shift in
regulatory oversight.
"Our obligation to purchase these additional aircraft is
conditioned upon there being no event that causes FedEx Express or
its employees not to be covered by the Railway Labor Act," reads a
January filing with the Securities and Exhanges Commission.
That clause is significant, as the Democratic-controlled -- and,
presumably, union-friendly -- Congress considers a measure that
would shift FedEx labor relations oversight from under the control
of the 1926 Railway Labor Act, to the National Labor Relations
Board. The latter is viewed as more ameable to the worker side of
labor relations than the RLA, which governs labor rules at most
unionized US airlines. The NLRB governs labor conduct at most of
FedEx's competitors, however, including UPS.
An attempt to force the issue was postponed last year, when the
Senate tabled the last FAA reauthorization
bill. As ANN reported, Minnesota Congressman James
Oberstar
had attached a rider amendment to that bill,
calling for FedEx to come under the control of the NLRB. The
measure is once again under scrutiny as Congress works on a new
attempt to pass a funding bill for the agency.
If FedEx is forced by Congress to make the move to the National
Labor Relations Board, unions would be allowed to hold
representation votes at one FedEx station at a time; under the
Railway Labor Act, unions must hold a company-wide vote within a
set timeframe, a practice that's essentially unworkable given
FedEx's global organizational structure. That stipulation has kept
FedEx largely union-free as a result.
Only one group of FedEx workers is currently unionized, its
pilots. Company spokesman Maury Lane says if more unions are
allowed in, they would compromise FedEx's cost structure and
financial strategy... which has already been stressed by the
current economic recession.
"It's difficult to make large-scale capital investments like
airplanes if you are unsure if you are going to be able to fully
utilize them," Lane said of the impending 777 order, which came in November 2006
on the heels of FedEx cancelling an order for the stillborn Airbus
A380 Freighter.
If FedEx cancels the order, it would mark a significant setback
for Boeing, which has struggled this year to garner new orders and
retain current ones. Each 777 Freighter is worth close to $256
million at list prices.
Of course, that's precisely the message FedEx wants to
deliver.