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VOL. 124 | NO. 58 | Wednesday, March 25, 2009

FedEx Plays ‘Hardball’ Over Possible Union Move

By Eric Smith

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FedEx Corp. might rescind its option to purchase $6.7 billion in Boeing aircraft if Congress passes a law that would classify the company under the National Labor Relations Act. That move, in turn, would pave the way for unionization at the shipping giant.

In a gambit being labeled as political and economic hardball, the Memphis-based company has said it would only move forward on its contract to buy 30 American-made Boeing 777s, with the option for an additional 15, if FedEx Express employees remain covered under the National Railway Labor Act.

“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,” the company said, in part, in a U.S. Securities and Exchange Commission filing Friday.

Being governed by the Railway Labor Act makes it more difficult for unions, such as the International Brotherhood of Teamsters, to establish a foothold within the company.

FedEx has benefited from the Railway Labor Act because a union would need to organize employees nationally rather than locally. Over the years, that task has proved to be a difficult one for unions such as the Teamsters.

FedEx spokesman Maury Lane told The Wall Street Journal that the change to employee status would potentially “strangle” the company, nullifying the need for aircraft investment.

“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 told the Journal Tuesday. He added that the pending legislation could be “detrimental to the way we operate our company.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 38 38 12,796
MORTGAGES 27 27 8,030
FORECLOSURE NOTICES 6 6 1,215
BUILDING PERMITS 137 137 30,071
BANKRUPTCIES 44 44 6,108
BUSINESS LICENSES 8 8 2,301
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0