What Can 'Brown' Do for Big Labor?

With union membership steadily declining since the late 1960s, organized labor today represents only about 12 percent of the American workforce. Unions lost 326,000 members in the last year alone. That's why they are pressing congressional Democrats -- who owe their majority status in part to campaign support from labor -- for legislation to help breathe life into their movement.

So far, the push has yielded limited success. Unions helped lead the fight to raise the minimum wage and, on a few bills, Democrats have inserted language favorable to labor, such as requirements for the union wage rate on certain construction projects. But unions suffered a high-profile defeat when the Senate declined to take up a bill that would make it easier to organize workplaces.

One legislative battle is coming, though, that may give labor's cause a boost. This fight -- billed as a clash of the package-delivery titans -- is all the more interesting because the unions have an unlikely corporate ally. United Parcel Service Inc. has joined the International Brotherhood of Teamsters and the AFL-CIO to push for changes in federal law that would help them make inroads with the workers at rival FedEx Corp.

UPS, the employer of 230,000 Teamsters, has been a union shop for eight decades. FedEx has successfully resisted organized labor since it was founded more than 30 years ago, and few of its workers are unionized. Now, as the two delivery companies compete for market share, the unions and UPS alike want FedEx to pay its express-mail handlers union-scale wages and benefits.

This unusual alliance is lobbying to use a reauthorization bill for the Federal Aviation Administration (FAA) to change a law that has kept the FedEx overnight-package division out from under the jurisdiction of the National Labor Relations Act (NLRA), the 1935 law that covers most collective bargaining activities.

That division of the company, FedA-Ex Express, currently falls under the Railway Labor Act, an even older law that applies to companies deemed to be engaged in critical interstate transportation and requires employees to organize nationwide if they want to form a union. The Teamsters say they would be able to make more inroads at FedEx if they were able to hold union elections at individual job sites, as is permitted under the NLRA.

The effort may seem of little consequence when compared with top priorities on labor's national agenda, especially the sweeping bill now stalled in the Senate that would allow workers to form unions by signing cards instead of voting in secret-ballot elections. But experts say incremental changes making it easier to organize small segments of the workforce represent unions' best hope, unless Democrats increase their majorities in Congress and win the White House next year.

"It's not at all guaranteed that they'll get [the organizing card bill] passed in the next two, four or six years," said Richard Hurd, director of the labor studies program at Cornell University. "These smaller political actions both at the federal and state level are essential and have more potential for payoff now."

The FedEx-UPS dispute has been brewing for years. Memphis-based FedEx started operating in 1973 as an air freight service and is subject to the Railway Labor Act (RLA) because that law has applied to airlines since 1936. UPS, which turned 100 this year and is headquartered in Atlanta, employed messengers who delivered packages by bicycle and on foot before launching its fleet of trucks, and it has always been subject to the NLRA.

Over the decades, the two companies have become very similar. UPS has expanded into the overnight delivery business, while FedEx now has FedEx Ground, a separate division that handles road shipments. Both have storefront mailing centers. UPS argues that the two companies are essentially in the same business and should be treated the same under federal law.

"If you receive a package from any other express-delivery driver, he or she will do exactly the same functions as a FedEx Express driver," said UPS spokesman Malcolm Berkley. "If you have people performing the same functions, even if they're at different companies, they should be under the same labor law."

FedEx is keenly aware that it has become a convenient target for labor. "I would hope this doesn't turn into a union payback," said company spokesman Maury Lane. "That would be unfair to us, because we've been following the law."

FedEx is mounting a vigorous campaign to keep its Express operations under the Railway Labor Act. The company argues that FedEx is very different from UPS because its ground, express, and other operations are separate companies. FedEx Express is still essentially an airline, the company says. FedEx Ground, in contrast, employs drivers who are independent contractors and as a result aren't organized. But because the ground division's operations fall under the jurisdiction of the NLRA, groups of workers in many states have sued in court and petitioned the National Labor Relations Board to organize labor units.

Together, UPS and FedEx handle about 22 million packages a day. They account for 82 percent of the $59 billion-a-year U.S. parcel-delivery market, according to transportation consultant Satish Jindel, who has worked with both companies. "If UPS and FedEx stopped operating tomorrow, the country would feel the pain," he said. "Within a matter of days, the things that you expect to find in department stores would not be there."

That's an argument FedEx hopes to use to its advantage. If employees at both companies were unionized and went on strike, Lane said, the national economy could be jeopardized.

"The RLA was created for companies like FedEx to ensure we had a continuity of interstate commerce, to ensure a healthy national economy," Lane said. "This amendment [to the FAA reauthorization bill] would put that in danger."

Meanwhile, unions view the battle as an opportunity to make inroads at a company that has long resisted organizing efforts. Of the 280,000 FedEx employees and independent contractors, only 5,000 pilots at FedEx Express are union members. The Teamsters say they want FedEx Express drivers to have the same opportunities as those at UPS. In 2003, according to salary data from court filings, the typical FedEx Express driver made $18.34 an hour. The typical UPS driver was paid about $24.75. Today, UPS says a typical driver earns about $70,000 annually, including overtime. FedEx declined to release salary figures.

"We view UPS as a good union employer that bargains in good faith," said Teamsters spokeswoman Leslie Miller. "We view FedEx as a viciously anti-union, anti-worker employer."

The FedEx-union battle last arose on Capitol Hill in 1996, when Republicans put language protecting the company's status under the Railway Labor Act into an earlier FAA authorization bill. The current standoff could be resolved soon. The House Transportation and Infrastructure Committee voted 51-18 in late June to add language to the FAA bill that would subject FedEx to the NLRA. That measure will reach the House floor this month.

The FedEx language is one of several union priorities Democrats want to enact before the end of the session. House Democrats have added pro-labor language to a range of bills, including provisions guaranteeing prevailing wages on construction projects and preventing privatization of government work. They also want to use the FAA legislation to open contract talks with air traffic controllers.

Yet it's unclear whether any of these proposals can garner the 60 votes needed to get through the Senate. Those that do could face vetoes from President Bush, who has already voiced displeasure with several pro-labor provisions, if they make it to his desk.

Labor advocates and detractors both say that all of this is merely a prelude to what will happen after the 2008 election. Unions are hoping the next president will be more receptive to their efforts. And they view the broader fight over making it easier for workers to form unions as a multi-year effort. The legislation stalled in the Senate not only would allow workers to unionize by signing cards, it would increase penalties for employers who illegally thwart organizing efforts.

"There's been smart legislative maneuvering with the Democratic majority," said Roger Hickey, co-director of the liberal Campaign for America's Future. "They're able to get some important small changes, and the pressure is building for a more comprehensive approach."

Union foes, meanwhile, predict a backlash. "I think they're going to be surprised by the beating they take in the next election," said Greg Mourad, director of legislation at the National Right to Work Committee. Votes taken in the House and Senate on the card-organizing bill are "going to come back to bite them."

But the unions have mustered some support from Republicans in their fight with FedEx: 14 GOP House members voted in committee to change FedEx's labor law status. Unions have been persuasive in making the case that FedEx isn't a conventional airline, said Edward Wytkind, director of the transportation trades department at the AFL-CIO. "Having UPS involved, expressing their interests, making sure everybody is being treated the same helps," he said.

FedEx remains confident it will prevail. "UPS and the Teamsters shouldn't be trying to use a legislative bailout to further their customer and union growth," said FedEx's Lane. "We think Congress dictating a marketplace winner is wrong. That should be the choice of customers."

FAA reauthorization (HR 2881), CQ Weekly, p. 2043; union card-organizing (HR 800), p. 2044.

Source: CQ Weekly The definitive source for news about Congress. ©2007 Congressional Quarterly Inc. All Rights Reserved.