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The "Fedex Express language" avoidance maneuver

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The "Fedex Express language" avoidance maneuver

Old 12-25-2007, 05:00 PM
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Opposition to the "Fedex Express language" to the omnibus spending bill by the good US Senators from Tennessee this past week was nothing more than FDX management's successful lobbying effort to maintain a competitive cost advantage by depriving the ground delivery drivers the right to organize locally and negotiate an industry standard wage for the job they do. (Everyone else who does their job is not covered by RLA, but NLRA). Under RLA, it is nearly impossible for this group to organize since it will take a national effort and vote, not a local one.

This whole scheme of paying home delivery drivers as private contractors (using 1099s vs. W-2s) while at the same time arguing that they are airline employees seems like a real house of cards. What a deal for management: No benefits, no health care coverage, no retirement, and best of all, the US government's capitulation in maintaining a labor law loophole that provides nearly no chance for these "employees" to organize locally.

Does the one labor organization on the FDX property (ALPA) condone or condemn this labor practice? Does the pilot group support management's position or are they siding with organized labor on this provision (a.k.a. "Fedex Express language)?
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Old 12-25-2007, 05:13 PM
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How powerful is this language really? Didn't the Independent Contractors just win a billion dollar settlement?
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Old 12-25-2007, 05:25 PM
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The IRS issued a ruling for 2002 only. The billion dollar amount is what could be owed if all subsequent years are counted in the same way. Class action lawsuits are separate and filed in different jurisdictions.

FedEx was wrong to classify the drivers as independent contractors, but it was a brilliant move on its part to save untold amounts of money over the years. This scheme (and the use of the word is an understatement) reminds me of Enron. A not-so-ethical lawyer friend of mine once said:"now why didn't I think of that first?"
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Old 12-25-2007, 05:29 PM
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Originally Posted by vagabond View Post
The IRS issued a ruling for 2002 only. The billion dollar amount is what could be owed if all subsequent years are counted in the same way. Class action lawsuits are separate and filed in different jurisdictions.

FedEx was wrong to classify the drivers as independent contractors, but it was a brilliant move on its part to save untold amounts of money over the years. This scheme (and the use of the word is an understatement) reminds me of Enron. A not-so-ethical lawyer friend of mine once said:"now why didn't I think of that first?"
I agree it was a brilliant move to save money classifying drivers as independent contractors, but if they get sued by employees to get all this money back.....is it really that brilliant? Seems like it could create some bitterness in the long run?
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Old 12-25-2007, 05:55 PM
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Like all business enterprises, FedEx is out to make money for management, board members and shareholders. It's possible someone weighed the whole thing and thought the chances of the drivers getting up in arms about the intentional misclassification was small. If FedEx can push the mighty ALPA around, surely it can grind a few independent contractors to the dirt without much notice from anyone else.

The way things are, there is an IRS ruling for one year and a Massachusetts court ruling. There is no telling when the other rulings might come down the pipeline. Any final penalty will be appealed. Think of all the money it saved over the years off the backs of the drivers. It was worth it at the time and it will spend more money to continue to justify that long ago decision.

If "labor" and "brotherhood" are to mean anything at all, I think ALPA should be supportive of the drivers. But then, I'm only a street lawyer who has spent my entire career defending the underdog and the disenfranchised. What do I know.
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Old 12-25-2007, 06:04 PM
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Originally Posted by vagabond View Post
Like all business enterprises, FedEx is out to make money for management, board members and shareholders. It's possible someone weighed the whole thing and thought the chances of the drivers getting up in arms about the intentional misclassification was small. If FedEx can push the mighty ALPA around, surely it can grind a few independent contractors to the dirt without much notice from anyone else.

The way things are, there is an IRS ruling for one year and a Massachusetts court ruling. There is no telling when the other rulings might come down the pipeline. Any final penalty will be appealed. Think of all the money it saved over the years off the backs of the drivers. It was worth it at the time and it will spend more money to continue to justify that long ago decision.

If "labor" and "brotherhood" are to mean anything at all, I think ALPA should be supportive of the drivers. But then, I'm only a street lawyer who has spent my entire career defending the underdog and the disenfranchised. What do I know.
Vaga,
Aren't most court rulings of this type harmful to the bottom line of companies in the long run? I guess if you were in charge and saw something like this and knew you were gonna retire in the next XX years.....your bonus or compensation was based on bottom line.....then maybe I can see it. It will be interesting how this plays out..........
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Old 12-25-2007, 06:08 PM
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"Does the one labor organization on the FDX property (ALPA) condone or condemn this labor practice?"

With all due respect, you've got to be kidding. FedEx pilots (as a group) trying to help someone other than themselves if there is nothing in it for them, no way!

Just read some of the other posts, you pick the subject, and see how self centered and short sighted this group is. Just look at all the complaining over no more Purple Tails Forum, yet the moderators admit that we take to much time and effort because we cannot get along.

No guts, no glory....talks cheap.
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Old 12-25-2007, 06:14 PM
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Originally Posted by UPSierra View Post
This whole scheme of paying home delivery drivers as private contractors (using 1099s vs. W-2s) while at the same time arguing that they are airline employees seems like a real house of cards. What a deal for management: No benefits, no health care coverage, no retirement, and best of all, the US government's capitulation in maintaining a labor law loophole that provides nearly no chance for these "employees" to organize locally.
It's not quite as cut-and-dried as that. The recent lawsuits and IRS ruling involved FedEx GROUND, where the drivers are (currently) independent contractors. FedEx GROUND and FedEx EXPRESS are two completely different companies that are both owned by the FedEx Corporation (think Delta and Comair both owned by DAL). FedEx EXPRESS is governed by the RLA, while FedEX GROUND isn't. The "FedEx Express" language in the omnibus spending bill was an attempt to get FedEx Express out from under the RLA, making it easier for all employee groups to organize. It didn't apply to FedEx Ground, since they've never been under the RLA.
Clear as mud?

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Old 12-26-2007, 04:43 AM
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Originally Posted by zulu View Post
It didn't apply to FedEx Ground, since they've never been under the RLA.
With all due respect, the problem is that the RLA does apply to Fedex Ground, due to an amendment that FDX was able to insert into legislation several years ago, thanks to Sen. Trent Lott.

The "Fedex Express language" was designed to ensure workers who work in the FDX ground business were afforded the right to be governed by the correct (and less restrictive) set of labor laws (NLRA). As of today, if a set of FDX ground drivers want to organize locally, similar to any other ground driver at any other company, they can't due to the fact they are technically governed by RLA.

Last edited by UPSierra; 12-26-2007 at 04:56 AM.
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Old 12-26-2007, 08:28 AM
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Originally Posted by UPSierra View Post
With all due respect, the problem is that the RLA does apply to Fedex Ground, due to an amendment that FDX was able to insert into legislation several years ago, thanks to Sen. Trent Lott.
I definitely could be wrong, but I'm pretty sure that the legislation you're referring to placed ground (lower case "g") employees of Federal Express under the RLA. The company known as "Federal Express" was renamed "FedEx" in 1994, then again renamed "FedEx Express" in 2000 after the FedEx Corporation had been formed. If the Lott legislation from "several years ago" was before 1998, then it applies to "FedEx Express," not any of the other companies under the corporate umbrella.

Roadway Package System (RPS) was acquired by FedEx Corp in 1998, and renamed "FedEx Ground" in 2000 (at the same time FedEx Express was renamed). The NLRB ruled in 2001 that employees of FedEx Ground were governed under the NLRA. Up until now, this has been a moot point, since the largest groups at FedEx Ground -- the couriers and drivers -- have been independent contractors and not employees, and therefore had no need to unionize.

Originally Posted by UPSierra View Post
The "Fedex Express language" was designed to ensure workers who work in the FDX ground business were afforded the right to be governed by the correct (and less restrictive) set of labor laws (NLRA). As of today, if a set of FDX ground drivers want to organize locally, similar to any other ground driver at any other company, they can't due to the fact they are technically governed by RLA.
I think the confusion here comes from the terms "ground" (lower case "g") employees of FedEx Express, and employees of FedEx Ground (upper case "G"). FedEx Express has thousands of "ground" employees that, under the current rulings, have been subject to the RLA. This has made it very difficult for the FedEx Express "ground" drivers (or any other employee group) to organize. Employees of FedEx Ground, on the other hand, have been covered by the NLRA since acquisition, but since the drivers weren't technically "employees," there hasn't been a concerted drive to organize. I suspect that if the current court ruling reclassifying the drivers and couriers as employees, you'll see an organizing effort among them soon.

Confused yet? I know I am.

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