FedEx-UPS fight over FAA bill continues

WASHINGTON: FedEx plans to release additional video that will support its position against a House bill that would change the labor laws under which some of its employees are regulated.

WASHINGTON: FedEx plans to release additional video that will support its position against a House bill that would change the labor laws under which some of its employees are regulated. The new video takes a more historical perspective on the shipping industry than FedEx's previous videos that parodied rival UPS' past ads.

Although a Senate committee passed its version of the FAA Reauthorization Act yesterday without the amendment that affects FedEx, Congress will have to eventually reconcile the differing bills in a joint conference session. The bill, in general, is designed to provide the funding for the agency on a regular basis. 

Neither FedEx, nor UPS, plans to walk away from the issue.

"We're going continue to work very hard to let people know what will happen if FedEx is hurt by this," said Maury Lane, FedEx's director of corporate communications. "This will be as long as... it remains out there."

The House version of the bill passed in May includes a provision that would change the labor rules under which some of FedEx's drivers have historically been regulated. FedEx's pilots are already unionized and its freight, ground, and office workers fall under the National Labor Relations Act (NLRA), as do much of UPS' workers who are represented by the Teamsters. The House bill, though, has the potential to bring FedEx Express employees under the NLRA, too, which allows employees to organize into unions on a local basis.

Because its Express service encompasses its overnight delivery and is a network of airplanes and trucks, FedEx would prefer the employees remain under the Railway Labor Act (RLA), which is designed to minimize strike interruptions to vital transportation systems such as railroads, and now airlines, by allowing for presidential intervention and other means of mediation during the negotiation process.

“We operate on a hubs and spokes system,” said Lane. “The easiest way to throw a wrench in that is to have 15 ramp agents decide to go on strike in a vital hub. We won't have the ability to ensure our overnight packages are delivered.” He contends that the company is not "anti-labor," but rather "pro-reliability."

FedEx reacted to the House's decision with a campaign it began in June that painted UPS as receiving a “bailout” from the government, because it would take away FedEx's edge. As PRWeek previously pointed out, some elements of that campaign appeared to be created by Burson-Marsteller, but neither the agency, nor the shipping company would confirm its involvement.

"Our education initiative has been more successful than we ever thought possible," said Lane. "When we started, no one knew about the provision. Now people not only know about, [but] are following it, and are opposing it. And that's what this was about."  

While FedEx's public campaign includes YouTube videos and a call to action in which it urged the public to write letters to Congress, UPS' approach appears quieter. It issued statements on its Web site countering FedEx claims, but Malcolm Berkley, PR manager for UPS public affairs, was hesitant to even label them press releases.

“We have not issued a press release regarding this matter,” he said. “We posted information to our Web site to correct misinformation that's put out there. That's been an ongoing part of our strategy and approach.”

Whereas FedEx's Lane noted that its campaign has resulted in nearly 100,000 letters to Congress and significant page views to its microsite, Berkley explained that UPS is focused on the Hill and talking to media individually to explain its side.

“We continue to educate members of Congress and other interested parties with regard to it being a matter of fairness and equality,” he said. “It's the same job performed by drivers and it should be covered by the same laws. I would say when you have the facts on your side, you don't have to do a lot of screaming.”

UPS is not working with its AOR Fleishman-Hillard on the effort. Rather Berkley and his Atlanta colleague Norman Black are the prime spokespeople on the issue, he said.

Both Lane and Berkley noted that their communications teams are working in concert with lobbying efforts. A recent Wall Street Journal article pointed to the significant investment both companies are making in Washington on either side of this issue.

Lane said the communications team is “working hand in hand” with its lobbying counterparts and sharing “information as needed.”

This is not the first time this issue has risen since FedEx's inception in the 1970s. In fact this year's bill is actually a resurrection of the 2007 bill, which was left uncompleted at the end of last year. 

“This has been tried before, and it's been out of every final version,” added Helane Becker, a transportation analyst with Jesup & Lamont. “I think FedEx would welcome the opportunity to test it again. It's been adjudicated in court, and every time it's gone to court, FedEx was ruled an airline.”

FedEx, too, cites past precedent in its defense, including a 1991 ruling by the 9th US Circuit Court of Appeals in which it determined that: “Because it is an integrated system, it is a hybrid, an air carrier employing trucks. Those trucks do not destroy its status as an air carrier.”

Berkeley countered that courts “overturn or amend decisions every day.”

“It has nothing to do with the issue,” he said. “The issue is the application of the law and Congress' role is to ensure that the laws are applied equally.”

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