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FedEx CEO defends Railway Labor Act jurisdiction

(The following story by Bartholomew Sullivan appeared on the Memphis Commercial Appeal website on July 20.)

WASHINGTON, D.C. ó FedEx CEO and founder Frederick W. Smith, testifying before a Senate subcommittee Thursday, said removing FedEx Express drivers from the jurisdiction of the Railway Labor Act, as proposed in a House bill, would be bad public policy.

During a hearing of the Senate Finance Energy and Infrastructure subcommittee intended to air views on how best to pay for modernizing the air traffic control system, Sen. Trent Lott, R-Miss., asked Smith about a House bill dealing with the labor issue.

"We object very much for the insertion of language that affects only one company, and that's FedEx Express," Smith said. "FedEx Express has been under the Railway Labor Act since its inception when I formed the company in 1971."

The House Transportation and Infrastructure Committee last month passed an amendment to an air traffic control bill that takes the FedEx Express operation from the jurisdiction of the Railway Labor Act, which regulates collective bargaining for air and rail workers on a nationwide basis. U.S. Rep. Steve Cohen, D-Tenn., voted against the provision.

The International Brotherhood of Teamsters has been trying to organize the company's drivers at the local level, where labor disputes are resolved by the National Labor Relations Board. A labor dispute at a single local could affect FedEx's overall operation and jeopardize the company's reputation for next-day deliveries.

The Senate bill does not contain the labor provision and the issue will have to be resolved in a conference between the two houses if the Senate passes its bill. Lott expressed his discouragement that a bill will be passed.

"The clock is running," Lott said. "We're running out of time. We need this bill. We need modernization. I'm afraid we're not going to get it."

Smith gave a short history of the Railway Labor Act before pointing to a 1992 ruling by the 9th Circuit Court of Appeals that, Smith said, "is just crystal clear ... that FedEx Express pickup and delivery operations are an integral part of its air operation."

Smith said he objected the insertion of language that affects only his company and particularly that the House committee approved it without a public hearing.

Turning to Sen. Jim Bunning, R-Ky., who represents workers at the UPS hub at Louisville, Smith discussed the rival company.

"I will say this, a little bit immodestly, for which I apologize, Senator Bunning, but all those people wouldn't be in Louisville if it weren't for FedEx because we invented the industry," Smith said. He said UPS, whose drivers are represented by the Teamsters, came into being with a very different "genealogy" than FedEx.

"The correct resolution of this matter in the public interest would be for UPS to be put under the Railway Labor Act," he said.

Friday, July 20, 2007

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