FedEx CEO ‘Lobbying Fiercely’ To Preserve Special Treatment That Keeps His Drivers From Unionizing

Today, the Senate is debating a bill reauthorizing the Federal Aviation Administration (FAA) that had earlier been subjected to a hold by Sen. Bob Corker (R-TN). The FAA reauthoritzation passed by the House last year includes a change in labor law that would remove barriers to unionization for truck drivers at Memphis-based FedEx, and Corker wanted an assurance from Senate Majority Leader Harry Reid (D-NV) that the change would not be included in the final bill (since it is already not included in the Senate language).

Currently, FedEx is governed by the Railway Labor Act (RLA), which does not allow for the formation of local unions, while the change would pull FedEx under the National Labor Relation Act (NLRA) along with other shipping companies like UPS. Reid reportedly promised to keep the language out of the Senate bill, which was enough for Corker to release his hold.

However, it doesn’t seem like the House is prepared to let the case drop. And FedEx CEO Fred Smith — who was George W. Bush’s fraternity brother and has said that “I don’t intend to recognize any unions at Federal Express” — is not taking any chances. He is “lobbying fiercely” today against the change, claiming that allowing FedEx drivers to unionize means medical supplies won’t get delivered on time:

Smith warned that if the measure becomes law, the Memphis, Tenn.-based company would slow its growth — in part by immediately canceling an order of 15 Boeing jets valued in the billions of dollars. It would also cut back significantly in its $2 billion in annual capital expenditures, he said…Smith said FedEx Express depends on the Railway Labor Act for reliability and security. Because the act requires federal government permission for strikes, it allows FedEx Express to avoid local work stoppages — strikes that Smith said could delay shipments of urgent goods such as medical equipment.

Smith added that he “feels confident his company’s supporters could block the bill if it included the labor language the House adopted.”


These are some classic threats that Smith is throwing out: canceled work orders and delayed medical shipments! How terrible! But back in reality, it’s pretty clear that Smith is using exaggerated rhetoric to protect his company’s ability to deny its workers collective bargaining rights.

For starters, I’m not sure who Smith thinks he’s threatening when he says his company will stop trying to grow. That seems like cutting off his nose to spite his face, and presumably it would give his competitors a chance to seize market share. As for the charge about medical supplies, Smith doesn’t seem to have the same concern about his 4,500 already-unionized pilots shutting down everything.

The simple fact remains that current law gives FedEx an unfair advantage and keeps its drivers — who are already systematically misclassified as independent contractors so that FedEx doesn’t have to pay them benefits — from exercising their right to collectively bargain.