Brown Bailout update: UPS goes on the attack

The next chapter in the FedEx Express and UPS battle has gone to the U.S. Senate. The Senate is set to take up its version of the FAA Reauthorization bill – a version which does not include the controversial language to reclassify FedEx Express employees under the National Labor Relations Act.

The House version, H.R. 915, does include that language and has created quite a stir from both FedEx Express and UPS. The two package-delivery giants are battling over the insertion of the paragraph. FedEx Express’ argument is that it is an airline and is rightly classified under the Railway Labor Act. UPS and its supporters have countered with the argument that when FedEx Express packages are delivered to the door, that job is being performed by a driver executing the same duties as a UPS driver, who is classified under the National Labor Relations Act.

The real argument is over unions. Under the Railway Labor Act, a union must recruit the entire organization of a company at once as opposed to the Labor Relations Act which allows unionization on a facility-by-facility basis.

FedEx immediately attacked the language in the House version of the bill. A web site, brownbailout.com, was set up to disseminate “the truth” as seen through the eyes of FedEx. FedEx has claimed that the language is nothing more than a government handout to UPS that will make FedEx Express non-competitive due to rising costs.

UPS has responded as well. According to Business First of Louisville, a Washington, D.C., public relations firm representing UPS is helping the company’s employees write letters to Congress. UPS is compensating the employees for time spent writing the letters, which are based on a template supplied by the company, Malcolm Berkley, the public relations manager, told Business First.

So where do we stand today? While the Senate version doesn’t include the language, when the two bills are merged, you can bet this will become a hotly contested issue. Whether it ends up in the final bill sent to the president remains to be seen, but it probably should, in my opinion.