"When a Company Does Well, its Pilots Do Well Too"
Its a proven fact: when a company and its unionized workforce conduct negotiations as equals, the resulting, mutually acceptable contract works to both sides benefit. The company gets the stability and predictability of a labor contract just like a sales contract with a vendor provides. The workers get the wages and benefits that recognize their hard work and contribution to the success of the company and this encourages even greater productivity and hard work.
That's the lesson of the most recent contract reached between FedEx Express and the FedEx pilots in ALPA . The contract secures 9% raise for the first year with 3% raises in the following years, pension contributions for retiree pilots and a signing bonus among plus job rule conditions.
The pilots union at FedEx is getting their fair share of a growing pie. Yet the company denies its other workers - the drivers, the sorters, the CSAs, the mechanics - the right to even vote for a union. Are these workers' contribution any less important than the pilots? Of course not.
-- October 18
TeamsterPower Talks Bush, FedEx and more on Daily Kos
So on Sept. 27, FedEx CEO Fred Smith and FedEx board member Pitt Hyde hosted a fundraiser for Republican Senate candidate Bob Corker in Memphis where President Bush was the keynote speaker. Smith, his wife, Hyde and his wife co-hosted the $2,100 a plate fundraiser at Hyde's home.
Then today, President Bush at a FedEx facility in suburban Washington sat in on a roundtable discussion with other business owners - no hourly workers were apparently there to puncture the Bush bubble.
TeamsterPower has put a long run down of the swirl of politics, policies and practices between the Bush Administration and Fred Smith's FedEx. Go ahead over the community at Daily Kos to add your voice to the discussion.
-- October 06
Teamsters General President Hoffa Criticizes Bush Policies and FedEx Practices
Teamsters General President Jim Hoffa issued a press release today following President George W. Bush's speech at a FedEx facility outside Washington, DC
Today, President Bush used mediocre monthly payroll figures to give himself a self-congratulatory pat on the back about an economy that is failing American workers. It is fitting that the White House chose to spin their skewed economic message at a FedEx facility in Washington, D.C., one of the most anti-worker companies in the United States.
FedEx has created a business model with a cutthroat mentality even Machiavelli would admire. CEO Fred Smith will collect over $10 million in compensation and dividend income this year alone, money that he earns by exploiting thousands of FedEx Ground drivers through an "independent contractor" model.
FedEx has abused this independent contractor status to shift risks and costs onto the drivers and taxpayers. The drivers take on costs that should be paid by the company, including trucks, uniforms and digital scanners.
That's just the start of the statement. General President Hoffa really gets on a roll.
-- October 06
$61 Million Award Becomes $12.4 Million
The presiding judge in the California discrimination case that resulted in a $61 million dollar jury award for two FedEx Ground Lebanese-American drivers reduced the amount to $12.4 million.
In a shocking quote, Alameda County Superior Court Judge Stephen Dombrink said, "The harassment was mostly just offensive name calling." The jury heard of a FedEx manager calling law abiding Americans "terrorists" and worse because of their ethnicity yet the judge saw fit to minimize the harassment and lessen the punishment.
Hopefully FedEx and that manager will learn the proper lesson in all this. And not the wrong lesson - like what one lawyer in the case is quoted as saying, "We look forward to having (the award) reduced even farther by the Court of Appeal."
-- September 14
Fred Smith Pay and FedEx Corporate Governance Criticized
With less than two weeks to go before the FedEx Corporation annual shareholders' meeting in Memphis, professional proxy advisory firms are beginning to issue their reports on corporate governance and performance at FedEx. First out of the gate, Proxy Governance has recommended that shareholders withhold votes on all members of the FedEx Corporation's Compensation Committee. The Compensation Committee is charged with reviewing and approving the pay packages for top executives including Fred Smith. Proxy Governance recommends withholding votes for board nominees James Barksdale, August Busch IV, Philip Greer, Charles Manatt and Paul Walsh.
Proxy Governance calculates that Fred Smith's compensation was "150 higher than the median executive pay from 20 companies with similar market capitalization." The research group further estimated that Fred Smit'ss average compensation package over the past three years was $17 million per year.
Proxy Governance and other firms of its kind advise shareholders on whether a company meets standards on corporate governance. These firms generally look at a company's overall performance, its stock performance, the independence of the board of directors from management and oversight of management behavior and compensation by the board of directors. Since FedEx Corporation does not allow for 'no' votes in its corporate governance, a 'withhold' recommendation is essentially a vote of no confidence in this group of nominees for the FedEx Board of Directors.
The International Brotherhood of Teamsters are sponsors of a shareholder proposal to be voted on at the shareholders' meeting on Sept. 25. The IBT proposes to change FedEx's governance to provide that nominees must achieve a majority of votes to be elected as board members. FedEx Corporation present by-laws allow for a nominee to be elected with a plurality of votes cast.
-- September 12
Another Discrimination Suit, Another Jury Award to a FedEx Employee
The latest lawsuit alleging discrimination at FedEx - this time by a FedEx Express shuttle driver in San Francisco - resulted in a jury decision of $500,000 in compensation for the worker.
FedEx claims its "Guaranteed Fair Treatment Procedure" is one of the best among all companies. Then why do these FedEx workers need to go to the state or to the feds or to the courts to get claims of discrimination resolved? This jury found not only the charges of discrimination were valid, the jury members also found that the company made this man's working life miserable to retaliate against his going outside the "GFTP" process.
FedEx can't avoid the conclusion that something is seriously wrong. Either their managers are of questionable character. Or "GFTP" itself is neither guaranteed or fair.
-- September 07
New Resource: MA Dept. of Workforce Development: Williams Decision
The Massachusetts Dept. of Workforce Development recently issued an appeal decision finding FedEx Home Delivery driver Bobby Williams to be an employee. We've posted the decision on the Resource page for this case . Bobby is one of the drivers involved in the Teamsters organizing campaign at the Northboro terminal. Good to see him collecting what is rightfully his under Massachusetts law.
The Massachusetts law is clear. The Massachusetts law is direct, using only a three point test to determine employment status. And the Massachusetts law is well known to practitioners in that state. It is only a matter of time before the Massachusetts law punches a huge hole in the legal underpinnings of the FedEx Ground misclassification scheme.
-- September 05
Are "contractors" Paying FedEx Parking Tickets?
FedEx Express drivers are most likely part of any deal the company has with New York City or other municipal governments to cover parking or other non-moving violations. But what about FedEx Ground, Home Delivery and Freight "contractors"? Are these drivers paying the fines? As pointed out in the expert witness testimony in the Estrada case (which can be read here in an PDF document), company manuals push that responsibility onto the drivers. Seems like just another issue that would be resolved once all drivers become employes.
-- September 01
FedEx Freight Driver to Talk Teamster on Blog
The Change to Win Federation announced a blog for Labor Day that will follow FedEx Freight driver Joe Nuno in his efforts to lead his terminal into the Teamsters family. Joe has courageously spread the union yes message for years inside FedEx Freight and its predecessor companies. Joe, local union leaders and Teamsters union members in Southern California are working together to organize FedEx Freight drivers to get a strong Teamsters contract. You can sign up and stay in touch with Joe.
-- August 31
FedEx Withdraws HOS Exemption Application
FedEx withdrew its HOS exemption application as of 8/16/06. DoT posted FedEx's letter on 8/23/06. Drivers should continue to submit comments on HOS violations to the docket (Remember: Docket No 24231). We will keep updating our Resource page as needed.
According to Traffic World in its Aug. 21 edition (sorry, not available online):
FedEx's request had drawn criticism from some drivers and from the International Brotherhood of Teamsters, which is fighting the company on the indepedent contractor question. "The best reason to give you (for withdrawing the request) is that our business continues to evolve and we are assessing internally whether this is needed internally," FedEx Ground spokesman David Westrick said.
<snip>
The company has fought legal challenges in places including California, Indiana and Massachusetts that seek to classify FedEx Ground drivers as FedEx employees rather than independent contractors. According to a group of lawyers representing labor in these cases, 31 such suits are pending against FedEx Ground or FedEx Home Delivery in 24 states.
That last sentence in the Traffic World quote contains an error: the lawyers involved in the FedEx MDL are representing former and present FedEx Ground and HD drivers. "Labor" is not a plaintiff in those cases.
That raises the most important lesson to all this. FedEx internally can say anything internally they want internally why they internally yanked this HOS exemption application. But go to the DoT docket and read the comments (Remember: Docket No 24231) from individual Ground or HD drivers. FedEx drivers pointed to the realities of their jobs and exposed the "inaccuracies" of the application's depiction of their jobs. Just like drivers are fighting for their rights in the MDL. Now the HOS genie is out of the bottle. And it is up to all of us to press the DoT to get to the bottom of the driver safety issues at FedEx Ground.
-- August 24
More on FedEx Ground/HD and FMCSA
The FedEx Home Delivery application for an FMCSA hours of service exemption raises so many issues, it is hard to know where to start. First, this is a driver safety issue and a public safety issue because the hours of service regs at core are meant to prevent accidents that result from driver fatigue. So anyone who is concerned with driver safety definitely should add their comments at the Dept of Transportation site. (Remember: Docket #24231.)
Additionally, this application is a stark example of FedEx trying to extend its control over its drivers. The company cites regulations such as the FMCSA as reasons why it is obligated to broadly "control contractors" in the face of legal challenges to the misclassification scam - but at the same time the company goes to the government looking for exemptions from the regs that could alter terms in the operating agreement to the company's benefit at the expense of their drivers' safety and so-called "independence."
-- August 17
Disingenuous Nonsense Report: 8.9.06 Edition
Now this throwaway quote doesn't come out of the mouth of one of the FedEx spokes-podpeople, but it still qualifies as nonsense.
According to a real estate developer whose deal with FedEx hinges on a politician's whim, "FedEx is a great corporate citizen."
During the debate over the potential tax implications for the FedEx facility in Gilberts, residents and elected officials cite concern over potential lost tax revenue from an "industrial" development as opposed to a "commercial" development. It seems that industrial businesses only pay property taxes while commercial businesses also contribute sales taxes on transactions.
We couldn't tell from the news accounts, but if this is a FedEx Ground or Home Delivery terminal it would also mean that the company would be avoiding all the other taxes - like state income taxes, unemployment & workers compensation taxes - that the "contractor" scam passes on to drivers.
-- August 09
What Would You Do With $1.94 Billion in Cash?
The Fitch Ratings press release that was posted in the clips earlier made an interesting observation:
FedEx has a strong liquidity position, including $1.94 billion in cash on hand at May 31 and access to a $1 billion revolving credit facility. The proceeds from today's notes offering further bolster the company's liquidity. Fitch expects operating cash flow to remain robust in fiscal 2007, due to continued favorable pricing and the company's focus on improving productivity. However, heavy capital spending and acquisition expenses, along with $850 million in debt maturities and higher dividend payments mean calls on operating cash flow will be significant.
There are any number of things to do with the $1 billion in new cash that FedEx borrowed yesterday and the $1.94 billion in cash on hand that Fitch noted. FedEx can start to pay off its Watkins Motor Lines and Chinese purchases, it can pay down past debt, it can give away more cash to shareholders (like Fred Smith who'll get a dividend bonus of roughly $4.35 million this fiscal year) and it can refurbish certain barns.
Here's a thought. Those who actually make FedEx run should get their proper piece of the profits. The company could re-start the profit share programs for Express employees that were "suspended" after 9-11. Or comply with the law and make the Ground drivers employees. Or reinstate previous insurance coverage for FedEx Freight employees. Or even start a pension program for FedEx Freight East employees.
-- August 04
Second IRS Determination for FedEx Ground Driver as Employee
The hard-working legal team representing the drivers in the multi-district litigation against FedEx Ground sent out a revised press release on June 20. We now learn from the lawyers that there are two - count 'em 1 and 2 - drivers that have received final determinations from the IRS that the drivers were in fact employees and not "contractors." Here are the revised paragraphs from the later press release from Lynn Faris.
The Internal Revenue Service has reaffirmed its earlier decisions that two FedEx Ground drivers, one in Wisconsin the other in Missouri, were employees of the company and not independent contractors, as FedEx claimed. As a result, the drivers should have not been liable for Social Security and other employment taxes the government requires a true independent contractor pay, according to the final decisions in both cases the IRS issued July 12.
The cases involving former Wisconsin driver Sharon Pagels and Florissant, Missouri driver Rolando C. Thomas focus on the issue of worker status classification and the IRS Form S-88 filing. The decisions could have far reaching consequences for the company, according to Lynn Rossman Faris, Esq., the Oakland, California-based attorney who is lead counsel nationally in the 35 consolidated cases challenging FedEx's claim that its drivers are independent contractors.
We're still waiting for some reporter to ask the FedEx mouthpieces about those so-called "100 cases." Reporters need to find out what carries more weight in the ongoing litigation: two IRS determinations from 2006 or a South Carolina Human Affairs Commision decision from January 1991?
-- July 21
Can FedEx Ground Survive?
We're not the only one's asking ourselves that question.
A publication called State Tax Notes, one of the specialty online reports for tax lawyers, recently did an article on the contractor scam at FedEx titled "Tax Troubles for FedEx Ground?" The article is behind a for-fee firewall but clips from of it found their way to us.
In a concluding section called "Can FedEx Ground Survive", the authors write:
One reason FedEx Ground has been so successful in its competition with UPS is that it cut costs by classifying many of its drivers as independent contractors. Because a ruling from the California Unemployment Insurance Appeals Board will likely require FedEx Ground to change that classification, there is a question about whether the delivery company can survive. If it does, will the cost of payroll taxes, insurance, and benefits be passed on to consumers in the form of higher prices? Only time will tell. One attorney involved in the California class-action suit believes the judgment in the suit could cost FedEx Ground more than $200 million a year. Although that would be unfortunate for FedEx Ground, there are some upsides for the rest of us. First, FedEx Ground's massive profits appear to have been greatly enhanced through the company's improper use of so-called contractors. Second, from a tax standpoint, income tax compliance for contractors and other "sole proprietors" is considerably lower than that for regular employees. Classifying employees as contractors exacerbates that problem.
That is not to say that using contract employees is not a legitimate business model. However, what FedEx has been doing appears to be illegitimate because it combines the benefits of having employees with the benefits of using independent contractors. In sum, FedEx Ground likely has a decision to make. It can either continue to operate as is and pay payroll taxes, unemployment taxes, expenses, and benefits for its employees, or it can loosen up on the control it has over its drivers. Because the latter would likely include ending its delivery scheduling practice, that might not be feasible. Regardless of what the company decides, the California action is almost certain to hurt FedEx Ground's bottom line.
This article from State Tax Notes will not only be read by tax professionals, but also by state tax revenue agencies around the country. Perhaps the tax man elsewhere will be visiting FedEx Ground. Soon.
-- July 18
ANNOUNCEMENT TO ALL FEDEXWATCHERS
The FedExWatch.com web site recently had a major malfunction that caused registered user information to be erased from our system. The registration information was erased so no personal data has fallen into the wrong hands. There was simply a computer coding issue.
Users who registered on FedExWatch Version 2.0 since May 15 are asked to register again. Registration allows us to keep in touch with you and keep you informed about the growing movement of FedEx workers and Teamsters.
Thanks for taking the time to fill out the registration form.
-- July 14
Another CA Ground Driver fights and wins
All of the propaganda that FedEx can afford can't erase the fact that when a driver says "Enough!" and stands up for his rights, the driver wins and FedEx loses.
FedEx can cite the "100 cases" from their cherry-picked list and gullible reporters will quote them. But a April 1990 decision by the Virginia Industrial Commission doesn't hold much weight with anyone - certainly not with anyone with a brain and some authority.
FedEx Ground and Home Delivery drivers around the country should no longer fear that they don't have the power to stand up to FedEx. The facts and the law are on the side of the drivers. The only plan FedEx seems to have is to try and exhaust the drivers through the appeal process. Stay strong, guys and gals at G/HD, and you'll get the justice you deserve.
-- July 13
Teamsters Convention Highlights
The proceedings at the International Brotherhood of Teamsters 27th Convention have included a number of issues that directly impact FedEx workers and all workers in the transportation industry.
The 1,800 delegates unanimously approved a resolution that commits the full power of the IBT to bringing FedEx workers into the Teamsters union. The delegation committed the strength of the IBT and the Teamster membership to help solve problems FedEx workers face today - like ending the phony independent contractor classification scheme for Ground and Home Delivery drivers - and drive towards the ultimate goal of organizing FedEx workers.
There were two big announcements of developments with UPS that show how Teamsters representation brings real benefits to UPS workers.
The Teamsters and UPS agreed to enter into early negotiations to move towards a new national bargaining agreement that will insure further success for UPS Teamster members and Big Brown. FedEx salespeople should see clearly that they willl not be able to put any doubt into UPS customers' minds while the two sides are at the negotiating table.
Also, the Teamsters and UPS entered into an historic agreement to allow for card check recognition in organizing UPS Freight/Overnite. The convention floor erupted into cheers when Teamsters General President Jim Hoffa announced the agreement. Essentially, UPS management will not interfere with or intimidate its workers in joining the Teamsters and they will allow UPS Freight workers to join the Teamsters under a stream-lined process. Teamsters all around the country will join together to bring UPS Freight workers into the union under this card check and neutrality agreement. And UPS Freight workers will finally get the good wages, benefits and security of a Teamsters contract.
Rolf Buttner, the Postal Division Director at Ver.di - the German United Service Union and the largest union at DHL's corporate parent Duetsche Post WorldNet - brought a clear message of solidarity and strength to the delegation. Ver.di members make up 90% of the Duetsch Post WorldNet workforce in Germany. Buttner pledged to work hand in hand with the Teamsters and said "We want Teamster members to get collective bargaining agreements from coast to coast at DHL in the United States."
The convention clearly shows that Teamsters will put the power of the entire union behind the drive to organize workers in the delivery industry - at UPS, at DHL and at FedEx.
-- June 29
New resources: FedEx Ground Sues state of Oregon
FedEx Ground has sued the Oregon Employment Department to overturn an administrative order that ruled a FedEx Home Delivery multi-route "contractor" was an employee and eligible for unemployment insurance. The Administrative Law Judge found the driver was an employee and was fired "but not for misconduct."
FedEx appealed this order to the Oregon Court of Appeals in May 2006. We'll be tracking closely the court filings at the Resource page we've created for this case.
-- June 19
Don't Sit Out the Fight at FedEx Ground Actions
In a series of actions by Teamsters local unions, Teamster members fanned out around the country during June to distribute educational leaflets to FedEx Ground and Home Delivery drivers. Their message was simple: Don't Sit Out the Fight at FedEx Ground - Drivers are Employees, Not Contractors - Employees Have Rights to Form Unions
FedEx Ground and Home Delivery drivers are fighting against the illegal misclassification as "contractors" and the cost shifting of taxes and operating expenses that should rightly be paid by FedEx. The courts are repeatedly ruling for the drivers and against FedEx. When drivers and the Teamsters are fighting for union rights before the National Labor Relations Board, the Board is repeatedly ruling for the drivers and against FedEx.
If the Teamsters were at your station but you didn't get a chance to talk to someone, send us a note and we'll put you in touch with a person to answer your questions. If the Teamsters weren't around this time, send us a note and we'll get someone to contact you about your station. Send any email to fedexwatch AT teamster DOT org.
-- June 16
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