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Shipping Firms Seek Legislative Deliverance

FedEx, UPS Battle Over Labor Organizing Rules

As they continue to wage a high-dollar and nasty lobbying campaign, archrivals FedEx and UPS are awaiting final delivery of legislation that will determine whether they must abide by the same union organizing rules.

The two giant transportation companies have been at loggerheads for years over federal rules that make it harder for FedEx drivers to organize and strike.

But in legislation reauthorizing the Federal Aviation Administration, the House has inserted a provision that would place FedEx drivers under the jurisdiction of the National Labor Relations Act, as UPS drivers have been for decades.

Currently, FedEx is regulated by the Railway Labor Act, which was set up in 1926 to limit economically crippling strikes.

The Senate, however, refused to go along with the House on the labor provision when it approved its version of the FAA reauthorization in March. And now negotiators for the House and Senate must hash out whether that specific section will make it into the final version. The chambers have since approved an extension of the current FAA laws until July 3 to give lawmakers time to work out their differences.

In the meantime, the companies as well as the International Brotherhood of Teamsters, which supports putting FedEx drivers under the NLRA, are proceeding with their lobbying efforts, which are as intense as any seen on Capitol Hill.

FedEx has been running a multimillion-dollar public relations blitz that has sought to portray the union effort as tantamount to a Congressional bailout for UPS. In one video, a long-haired man stands in front of the Capitol asking for a bailout. The company claims that the possibility of strikes could disrupt its ability to compete in the delivery business. Furthermore, FedEx says that most of its business involves air delivery, while UPS largely depends on trucks.

“This whole effort is an effort to destroy FedEx’s reliability,” said Maury Lane, a FedEx spokesman.

Lane said FedEx is continuing to reach out to the public and lawmakers to ensure the final FAA legislation does not include the labor changes.

“This is lobbying and communications 101,” he said.

From the beginning of 2009 through March of this year, FedEx shelled out $21.1 million on lobbying. Last year, it ranked 14th among all groups and companies in lobbying budgets, spending more than oil giant BP and defense contractor Lockheed Martin.

The Memphis-based company also has tapped politically connected assistance, contracting with 14 outside lobbying firms that employ a number of former Senators. Not only is the Breaux Lott Leadership Group working for FedEx, but its founders, former Sen. John Breaux (D-La.) and former Senate Majority Leader Trent Lott (R-Miss.), are listed on the lobbying disclosure forms as personally working on the account.

FedEx hired the international public relations firm Burson-Marsteller to work specifically on this issue. The company also uses Ketchum as its primary public relations agency.

In addition, FedEx Chairman Fred Smith has been personally involved in lobbying on the issue. Lane said Smith travels to Washington frequently and will continue to do so.

Smith is a major political donor, particularly to Republicans. Since 2006, he has given more than $80,000 to the National Republican Senatorial Committee. He also contributed to the presidential campaign of Sen. John McCain (R-Ariz.) and the campaigns of Senate Minority Leader Mitch McConnell (R-Ky.) and Tennessee lawmakers such as Sen. Lamar Alexander (R), who has threatened to block FAA legislation if it includes the labor provision.

But Smith also donated $2,400 to the campaign of Senate Majority Leader Harry Reid (D-Nev.) last year.

While critics say that Smith has become obsessed with stopping the labor changes, Lane said that is “an overstatement.”

Despite FedEx’s extensive federal operation, Lane said UPS has benefited from key allies such as Transportation and Infrastructure Chairman James Oberstar. The Minnesota Democrat ensured the union section made it into the FAA bill that was under his committee’s jurisdiction.

“This is a gift that UPS is getting from their favorite chairman,” Lane said.

Oberstar spokesman Jim Berard said that adding the labor change has long been a priority of the chairman. He rebutted the characterization by FedEx that the provision amounted to a bailout — a term that has taken on political resonance recently because of public opposition to the federal bank bailouts.

“There’s no federal taxpayer money going to UPS,” Berard said. “We’re just making sure everyone is playing by the same rules.”

Since 1989, Oberstar has been one of the top recipients of campaign contributions from the UPS political action committee and its executives, receiving $84,000, according to an analysis by the Center for Responsive Politics. But during the same period, UPS gave more to other Members who are not considered allies of organized labor, including House Minority Leader John Boehner (R-Ohio), who received $96,000, and Appropriations ranking member Jerry Lewis (R-Calif.), who received $88,000.

Both transportation companies have been active political contributors, with those affiliated with UPS giving $24 million and FedEx $18 million since 1990, according to the Center for Responsive Politics. Both companies also have similar giving patterns, contributing more to Republican candidates than Democrats over the past 15 years.

UPS spent almost $10 million on lobbying between January 2009 and March 2010. (FedEx chooses a more expansive method of lobbying disclosure reporting, including some activity such as advocacy advertising and state activity that UPS does not.)

UPS, which spearheaded a letter-writing campaign to Congress last year, will continue its education process, company spokesman Malcolm Berkley said. But the spokesman said UPS was not engaging in the kind of massive public relations campaign being underwritten by FedEx.

Berkley also called the bailout claim by FedEx “a ridiculous notion.”

He said that FedEx truck drivers are treated differently than other drivers in the country. The provision would not apply to FedEx pilots, who would still come under the Railway Labor Act.

Berkley also said that while UPS and unions worked together on this issue, that did not mean they were aligned on all matters.

Ken Hall, a Teamsters official, said the labor provision regarding FedEx is one of the top three priorities on Capitol Hill for his union.

“We are going to the mat,” Hall said. He said about 100,000 drivers, loaders and unloaders at FedEx would be covered under new union rules if the changes are adapted.

The fight over how FedEx drivers should be treated has been going on for two decades. In 1996, FedEx was successful at getting Congress to beat back an effort by the late Sen. Edward Kennedy (D-Mass.) to change the labor status.

Jill Fisch, a law professor at University of Pennsylvania who has written about the political power of FedEx, said the company and its president, Smith, have successfully cultivated relationships with Congress.

She said he company was particularly effective in mobilizing its customers to lobby Congress to support its issues.

“FedEx is a very savvy political player,” Fisch said.

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