Folks claiming that talk-show host Rush Limbaugh speaks for conservatives are off the mark. Rush speaks to conservatives, not for them. And he speaks to them in their own language, which is why he has such a gigantic listening audience. And because he has such a gigantic listening audience of conservatives, it is especially important for other conservatives to step forward and set the record straight on those rare occasions when Rush gets one wrong.
So it is with Limbaugh’s recent criticism of a bill which would change the way FedEx Express receives special treatment under the nation’s labor laws. Claims by FedEx to the contrary, this bill isn’t a “bailout” for UPS so much as it’s an elimination of a corporate welfare subsidy for FedEx. But first, let me stipulate two points:
(1) FedEx is a great American success story. It brought innovation and technology into the marketplace and invented the overnight shipping industry long before Al Gore invented the Internet.
(2) Unions suck. Big Labor generally stands for paying every employee the same amount of money even if one worker does a great job and another one sleeps all day. I believe labor unions are a doorway to socialism in the United States and if I had my way, I’d outlaw all of them – especially government workers unions, and super-especially teachers unions. So I’m no union “symp.”
OK, with that out of the way, here’s a list of all the companies whose commercial truck drivers are covered under the National Labor Relations Act (NLRA):
UPS, Old Dominion Freight Line, Knight Transportation, DHL Ground, YRC Worldwide, JB Hunt, Schneider National, Con-way, Swift Transportation, Landstar System, Werner Enterprises, U.S. Express, Arkansas Best Corp., FFE Transportation, Greatwide Logistics, C.R. England, Saia, Averitt Express, Prime, CRST International, R+L Carriers, NFI Industries, Kenan Advantage Group, Covenant Transportation Group, Universal Truckload Services, Ruan Transportation, Southeastern Freight Lines, Allied Holdings, Quality Distribution, Anderson Trucking, Vitran, Heartland Express, Interstate Distributor, Celadon, Dart Transit, Western Express, Smithway Motor Express, Ryder System, Roadrunner Transportation, Comcar Industries, AAA Cooper Transportation, USA Truck, Marten Transport, Shevell Group, Central Transportation and Dynamex.
Now here’s the list of the all the companies whose commercial truck drivers are NOT covered under the National Labor Relations Act (NLRA):
FedEx Express.
I’m bettin’ you already know where I’m going with this without even knowing the specifics of the issue, don’t you?
Railways vs. Highways
Instead of being covered by the NLRA, FedEx Express drivers are covered under the Railway Labor Act. But why is this such a big deal?
As the Washington Times explained in a recent editorial, Congress long ago “recognized that certain sorts of transportation companies are the lifeblood of interstate commerce.” As such, it passed the Railway Labor Act (RLA) in 1926 to which it applied “special labor-relations rules to railroads.” Those special rules later were expanded to include airline-based businesses as well.
The RLA, the Times noted, “has provided successfully for means other than strikes to resolve labor disputes fairly and quickly, without favoring either side.” Which is another way of saying that the NLRA, by comparison, does NOT quickly and fairly resolve labor disputes without favoring one side over the other. No wonder American companies would rather not be covered under the NLRA.
Another benefit of being covered by the RLA as opposed to the NLRA, notes Business Week, is that it “carries a difficult path to unionization that requires a national vote by every worker at a company and doesn’t allow for organizing at a local terminal-by-terminal level.” That would be like trying to unionize Wal-Mart in one huge national vote rather than going store by store, one at a time.
FedEx was originally started as an airline, which is why it’s covered under the RLA rather than the NLRA. It’s also currently non-union and wants to stay that way. And who can blame them? As Whole Foods CEO John Mackey once put it, “The union is like having herpes. It doesn’t kill you, but it’s unpleasant and inconvenient.”
In any event, this is what the issue is all about, boiled down to a level that even a member of Congress should be able to understand:
Let’s say you want to ship a package overnight from New York to Los Angeles to your sister. And let’s say you call UPS to handle the transaction. A UPS driver will come to your home, pick up your package, drive it to the airport, put it on a UPS plane and fly it to Los Angeles where it will be picked up by a UPS driver and delivered to your sister.
But let’s say you call FedEx instead. Here’s how the transaction will be handled: A FedEx driver will come to your home, pick up your package, drive it to the airport, put it on a FedEx plane and fly it to Los Angeles where it will be picked up by a FedEx driver and delivered to your sister.
In other words, both companies provide the exact same, identical service in the exact same, identical manner. And yet FedEx Express’s drivers are covered under the Railway Labor Act instead of the National Labor Relations Act. It makes no sense.
Eliminating an Unfair Advantage
In an effort to eliminate this “corporate welfare” benefit which only FedEx Express currently enjoys for its package delivery drivers, Rep. James Oberstar, Minnesota Democrat, has proposed an amendment to the Federal Aviation Administration reauthorization bill – the Express Carrier Employee Fairness Amendment – to close this loophole in the law and put FedEx Express on a level playing field with its competitors. The amendment would move non-airline related FedEx Express drivers from under the Railway Labor Act to under the National Labor Relations Act where they belong.
And here’s where conservatives such as Rush Limbaugh have inadvertently gotten themselves on the wrong side of this issue.
Let’s face it: Conservatives don’t like unions….or herpes either. So a move by a Democrat congressman in a Democrat Congress being led by a Democrat president which might make it easier for Big Labor to take over a non-union company like FedEx – and do to it what Big Labor has done to the American auto industry – would understandably result in a reflexive response by conservatives to oppose the bill.
However, this isn’t about Big Labor. It’s about treating similar workers in different companies equally under the same law. As it stands, FedEx enjoys an unfair competitive advantage over its rivals because FedEx Express drivers are covered under a more protective law which doesn’t cover a single one of its competitors.
And the company, great American success story that it is, isn’t as pure as the driven snow here. FedEx hasn’t exactly been shy about using this competitive advantage to poach customers from rivals in the marketplace. For example, whenever UPS and its union drivers approach contract negation time, here’s the general sales pitch FedEx delivers to UPS’ customers:
“You know, UPS drivers could go out on strike again soon. And if they do, we might not be able to handle all the additional deliveries from UPS customers. However, if you switch your account from UPS to FedEx today, you’ll become one of our existing customers and won’t be affected by the UPS strike. We’ll continue to deliver your packages on time and you won’t have to worry about a thing. Just sign here.”
Frightened customers who can’t afford to have their deliveries adversely impacted by a union strike at UPS are often scared into switching over to FedEx. That’s an unfair advantage not enjoyed because FedEx has been successful in discouraging its drivers from wanting to join the union, but because the law artificially does this for them.
FedExcess: A History of Law-Bending
And abusing legal loopholes in labor laws such as this isn’t something new to FedEx. The company for years has been trying to exempt many of its drivers from other employment laws which everyone else are subjected to, as well.
For example, even though their drivers drive FedEx trucks, wear FedEx uniforms and identify themselves as FedEx representatives, FedEx maintains these folks are “independent contractors” and not employees. The IRS and the Second Court of Appeals in California disagree.
According to an Appeals court ruling last year, the FedEx drivers “look like FedEx employees, act like FedEx employees, are paid like FedEx employees and receive many employee benefits.” As such, the Appeals court ruled that FedEx drivers are employees, not independent contractors, concluding that “if it looks like a duck, walks like a duck, swims like a duck, and quacks like a duck, it is a duck.”
The dangerous thing here is that FedEx’s attempts to abuse and circumvent the law regarding independent contractors puts all legitimate independent contractor relationships in jeopardy with Congress and the IRS. In this regard, FedEx is a rogue company whose efforts to use the law to gain an unfair advantage over its competitors put all American businesses in jeopardy. So while the conservative inclination to rush to FedEx’s defense is understandable, it is, at least in this case, misplaced.
Of course, a better field-leveling solution to all of this would be to repeal all non-life threatening labor laws completely and eliminate unions altogether. But we all know that ain’t gonna happen. So in the interest of fairness, it only makes sense that drivers who provide the exact same service be covered under the exact same labor relations law.
Pulling Out all the Stops to Stop Fairness
FedEx is fighting this field-leveling proposal tooth-and-nail, spending a FedEx jumbo jet full of cash on K Street lobbyists and a misleading advertising campaign which – at least as far as some conservatives are concerned – has been successful. FedEx founder and CEO Fred Smith is “chicken littling” Congress, conservatives and FedEx customers into believing that if the law is changed it will automatically raise his company’s operating costs and chase away customers.
Of course, many of those customers are probably former customers of competitors whom his company scared into joining the FedEx family in the first place, but whatever.
“FedEx is preparing to spend millions of dollars trying to convince Congress that a FedEx driver delivering a package is somehow different than a UPS driver delivering a package,” explains UPS spokesman Malcolm Berkeley. “Their packages aren’t delivered by airplanes and we don’t believe FedEx can fool Congress about that.”
Don’t be so sure. After all, we ARE talking about Congress here. Some of those people ain’t exactly the brightest bulbs on the Christmas tree.
Taking no chances, FedEx’s Smith has also resorted to what can only be characterized as economic blackmail, recently threatening to cancel a $10 billion purchase of several dozen Boeing 777 airplanes if Congress moves his drivers from the Railway Labor Act to the National Labor Relations Act.
But here’s the thing: Rightfully moving FedEx Express drivers from the RLA to the NRLA doesn’t mean the unions will automatically take over FedEx. As UPS notes, FedEx currently has 100,000 other employees who are already covered under the NRLA and they haven’t unionized.
Indeed, as long as FedEx treats its drivers well and makes a compelling case to its employees that unionizing the company would put the company at risk – you know, like Chrysler and GM – then there’s every reason to believe it could remain non-union, as it should be, even though it would now be governed by the same set of rules as everyone else.
Conservatives such as Rush Limbaugh who are jumping in bed with FedEx in opposition to this much deserved labor law change should be careful and look beyond the surface of this issue. Otherwise they could end up like the young man who thought he married a virgin only to find out after the fact that his lovely new bride, so virtuous-looking on the outside, had been ridden more times than Secretariat. Caveat emptor.
Responsible journalism entails performing reasonable research before printing something as factual. It is obvious to me as a former “independent contractor” that Chuck did not take the time to actually talk to an independent contractor or better yet spend a day with one to see how the relationship works. Instead he relied on 1 ruling by a very liberal leaning court (what about the other 50+ rulings that have supported the independent contractor classification Chuck???) to state as fact how the independent contractor model works. Had you taken the time to actually “research” I think you would agree that there is no “circumventing” of the law. This is a true win-win relationship. All you need to do is talk to a 6 vehicle contractor grossing over $500k per year. Where is the circumvention in that???
I love it when people like “matt” make fools of themselves by making foolish claims like his that I didn’t do “reasonable research” on FedEx’s abuse of the independent contractor laws.
In fact, had “matt” done HIS research, he’d have known that I had already written EXTENSIVELY on the independent contractor issue a little over a year ago – which you can find here and here.
Regardless, Chuck hates to see American workers make a fair wage, hence the typical neo-con views unions suck, and hence why neo-cons lose elections. Chuck rather have all Americans walk around with 1 tooth in their mouth, while his neo-con fat cats rake in the dough. Rush speaks FOR conservatives, get it right, and with such a LARGE audience, it is funny how the voters, voted opposite Rush/Muth’s outdated views, as these guys are purely entertainers, and not any type of “movers and shakers’ of the world.
Why in your column did you refer to FedEx Express Ground drivers if you understand the contractor model? There is no such thing, FedEx Ground and FedEx Express are separate operating companies that do not work together.
Please show me where I ever referred to “FedEx Express Ground” drivers. FedEx Express drivers DO drive on the ground, however. They don’t fly. That’s simply a statement of fact.
“Back in 1998, FedEx bought itself a ground transportation company, then-known as RPS, in order to compete directly with the likes of UPS. And because FedEx was already covered under the umbrella of the RLA, the company’s new FedEx Express ground drivers were wrongly placed under that umbrella as well.” Did this quote disappear? Did you actually correct your error or just erase it?
You know, UPS drivers could go out on strike again soon. And if they do, we might not be able to handle all the additional deliveries from UPS customers. However, if you switch your account from UPS to FedEx today, you’ll become one of our existing customers and won’t be affected by the UPS strike. We’ll continue to deliver your packages on time and you won’t have to worry about a thing. Just sign here.” Having worked for FedEx for 21 years I can tell you this is absolutely positively wrong. We don’t sell that way. Never have. By the way our pilots are union why would we use this tactic? We don’t.
I have an original post of your column, this version leaves a lot out, I can repost here so we are talking about the same article.
I agree in a perfect world all laws would be fair and applied equally but they are not. UPS had a monopoly for many years. FedEx came along and created the overnight industry and then purchased a ground network. There is very little different about FedEx Express other than technology than when it started and it was classified as an airline. You make it sound like we just delivered documents back then, not true. However its all over simplified. You want to be right on this one. There is a lot more to this. I agree it would be best to scrap both laws. FedEx is fighting this because there is a very real concern for the health of the company and without FedEx there is no competition left in the parcel delivery and yes it would revert to a UPS monopoly and that is really not good for anyone but UPS and the teamsters.
Yes, that reference was removed after confirming that the RPS drivers were not coverted into FedEx Express drivers. And since I did not allow inaccurate information to be left up on this blog, I’m not going to allow you to put it back on. That said, I still never wrote, as you accused, that these were “FedEx Express Ground” drivers as though their was some kind of hybrid driver between FedEx Express drivers and FedEx Ground drivers.
Sorry Chuck someone sent me the original post I don’t know why there are two different versions, so I apologize if I jumped to the conclusion you edited it after the fact, perhaps you just had different versions for different audiences. I do work for FedEx but I don’t speak for the corporation let me be clear about that. These are very much my own personal opinions. I know that FedEx is passionate about protecting their company, employees and profitability and even though to you the only issue is it fair to classify these two companies differently I think you also have to look at the consequences of putting FedEx under the NLRA. Yes its very possible that a union might not form at FedEx but what if it did? Right now workers have a choice, work for UPS, get higher pay and pay union dues,work for FedEx Ground and own your own business, or work for a lower hourly wage and work for FedEx Express. Many choose to work for a lower wage at FedEx Express for a reason. I agree that your premise has merit, but in the end its still not as simple as you want to make it and in fact this law change could adversely affect many lives and the competition in the parcel industry.
Chuck it was in fact an error you made and you did write FedEx Express ground drivers, glad you corrected your error but you did make it.
Oh, please. You’re fighting this because FedEx now enjoys a competitive advantage thanks to the law over UPS and you don’t want to give up your perk. I don’t blame you, but don’t try to wrap yourself around the flag and tell people you’re doing this just so that the Teamsters and UPS don’t have a monopoly over package delivery – the way the post office has for first class mail delivery. By the way, FedEx is in bed with the post office, isn’t it? Care to explain that one?
No, I did not. FedEx Express’s drivers ARE ground drivers. They don’t have wings and they can’t fly. The distinction you tried to make was in capitalizing “Ground” which indicates a separate company, FedEx Ground. My error was simply in suggesting that the RPS drivers became FedEx Express ground drivers and not FedEx Ground ground drivers. It’s the confusing way that FedEx has tried to skirt around the labor laws with FedEx Express and FedEx Ground which causes confusion with folks who haven’t worked for FedEx for 21 years.
You did use the words “Fedex Express ground drivers.” Enough said. As far as FedEx having a competitive edge? In what way? UPS has higher margins on their packages. They dominated the industry for 70 years and had deep pockets when FedEx came on the scene. They still have the majority of the Ground business and have a healthy share of the express. They operate under one company and FedEx uses two opcos to accomplish the same thing and at a greater expense. There are reasons for this. Where is the unfair advantage? Just because our drivers cannot unionize in regions? As far as the Post Office that was a business deal made between USPS and FedEx. UPS had the same opportunity to make the deal but did not, so what? It has been a good deal for both parties. UPS had the same opportunity. By the way I see you never addressed the completely erroneous sales pitch you highlighted and quoted in your article. We have never sold that way, I know I am in sales for FedEx, have you ever attended FedEx sales training? Have you ever actually heard a FedEx sales person say that? I bet not.
I am not wrapping anything in a flag, merely stating the truth, FedEx could be in serious trouble if our drivers went union and yes we will try to stop this law from passing as is our right in this still free country.
So you think it’s OK for the government to have a monopoly on a certain kind of delivery service but not OK if a private entity enjoys such a monopoly – even though your “UPS monopoly” scenario is total bull and you know it? In the first place, the law change would not necessarily mean FedEx would be unionized. In the second place, even if FedEx was unionized, that wouldn’t put FedEx out of business. If it would, then UPS would already be out of business. And third, there are package delivery services other than FedEx and UPS which would step in to fill any void. Your arguments simply don’t hold water. And YOU, not I, referred to FedEx Express Ground drivers. I merely said there were ground drivers working for FedEx Express. For you to keep trying to pretend otherwise is disingenuous….but unfortunately par for the course for FedEx on this issue.
You did write those words, fedex express ground drivers, live with it, error on your part and you removed the entire piece from your column. UPS survives having an union because they have a much larger market share and are able to use one truck to pick and deliver ground and air. No FedEx Express drivers might not unionize, but they might. It would hurt our company, why else would we expend so much time and money to fight it? I don’t think its good for anyone for there to be any monopoly. I didn’t set up the postal service, but its been around a long time. The deal between FedEx and USPS has nothing to do with their monopoly on regular mail delivery. So you don’t think that UPS had a monoply prior to FedEx? Also who are all these delivery companies that would step up and provide competition for UPS? The last one was DHL and they retreated from the domestic parcel market. Sorry you are not going to force me down. I have lots of valid points and if you would like to have a real discussion you could always respond to my email. However you would rather act like you know all in what appears to be your usual smug way instead of having a discussion. I have written here that I understand a lot of your points but you refuse to admit any mistakes in your assumptions, then taunt me.
I think as a 21 year employee for FedEx I have a bit more knowledge of the differences between UPS and FedEx and what unionizing could do to our company. You say you hate unions, so why not make it easier for UPS to not be union if that is what the company and their workers want? Why force FedEx to be at the same disadvantage? Your reasoning seems to be 1) you perceive FedEx to have some coddled advantage 2) You want to be the one that is right no matter what 3) You think that even though the NLRA is a bad law its more fair to force FedEx to deal with it than champion a new law 4) You really think FedEx is just whining? You think we would go the lengths we are just because we want to belly ache? No that is not the case. As you stated FedEx is a great company and we would not do this if there was not a lot to lose.
PS you didn’t apologize for your absurd made up quote about our sales tactics but I will take your silence as recognition you were off base there. thanks for the debate I enjoyed it but I can tell that there is no way to discuss this with you. I am open to understand and even support some of your views but you obviously can’t do the same. Just answer me this, why would FedEx be so worried if there was not a real threat to our way of doing business? Oh and please do name all those parcel delivery companies that can pick up a package in DC at 8 pm at the blood bank and get it to LA tmrw by 10:30? please name them (other than UPS)
Vicki, what are you trying to pull? Now in your first sentence you decide NOT to capital “fedex express.” I wonder why? Because I DID use the proper capitalization in the paragraph you keep alluding to. I wrote “FedEx Express ground drivers.” You keep trying to make folks reading this blog think that I wrote “FedEx Ground ground drivers.” I did no such thing. I understand the difference between FedEx Express ground drivers and FedEx Ground ground drivers and that’s why I dropped the reference to RPS once I double-checked and found out they were absorbed by FedEx Ground and not FedEx Express. You can fool and confuse a lot of people with your double-talk, but not me. I immediately corrected my mistake. You keep making yours.
Vicki, there is no question that FedEx enjoys a bonanza of benefits by not having FedEx Express drivers falling under the same law as everyone else. I understand completely why you and your company are trying to keep this benefit. I never said you shouldn’t try to retain this unequal treatment. I’m just saying the rest of us shouldn’t be supporting it; that two companies who provide the same service should be treated the same under the law. It’s the American way and it really is just that simple.
Vicki, I can’t believe you actually wrote this: “Oh and please do name all those parcel delivery companies that can pick up a package in DC at 8 pm at the blood bank and get it to LA tmrw by 10:30? please name them (other than UPS).”
I think it’s page 174 in the teachers union handbook. “We can’t offer vouchers to parents because there aren’t enough private schools to handle all the students.” Gimme a break.
Do you really think that if FedEx folded up its tent tomorrow there wouldn’t be some other service around which could (a) pick up blood from the local blood bank and drive it to the airport, then (b) put it on a plane to Los Angeles, and (c) have someone pick it up from the airport and take it to the hospital? Of course others would fill that vaccuum.
And please explain to all the readers here (a) how many packages does FedEx Express handle every day and (b) of those, how many are 8 o’clock pickups from a blood bank which have to be delivered to Los Angeles by 10:30 am the next morning. Inquiring minds can’t wait to hear your response to that one.
And finally, as for the sales tactic, we all know how these “verbotten” things are handled with a wink and nod. Are you really that naive, or are you being disingenuous with us here? Indeed, a sales person for FedEx named “Carole” just last week wrote the following on a blog:
So even in telling everyone how she supposedly was barred (wink, wink) from discussing UPS and the fact that they’re union, this person found a way to brink up the Teamsters strike! I mean, it doesn’t get more blatant than that.
My mistake. Upon further investigation it turns out it DOES get more blatant than that.
FedEx has set up an anti-UPS website from which it has laughably been claiming that changing the law to treat FedEx Express’s ground drivers like every other express delivery ground driver equally under the same law was a “bailout.”
That absurdity aside, the website has a separate page specifically detailing the 1997 UPS strike and using it as an argument to keep FedEx under the existing law which clearly gives it a competitive advantage. Here’s exactly what appears on the “Brown Bailout” website:
Now, if FedEx is willing to so blatantly use the 1997 UPS strike in this manner to block a change in the law which would take away their competitive advantage, are we really supposed to believe they’ve never used the 1997 UPS strike in private (wink, wink) sales conversations with potential customers? To believe that you’d have to be as gullible as the kid in Jack and the Beanstalk.
Chuck,
You are indeed accurate in reporting the FedEx Sales pitch…I have talked with multiple customers who have told me that was exactly what FedEx was trying to sell the last time UPS was in contract talks with the Teamsters…obviously Vicky is simply spewing the FedEx talking points.