Unionized pilots at FedEx Corp. have ratified a new labor contract, with 83% voting in favor of the collective bargaining agreement following more than five years of bitter negotiations, the Air Line Pilots Association announced on Tuesday.
The four-year FedEx (NYSE: FDX) agreement, which takes effect on June 29 and becomes eligible for updating in December 2030, addresses multiple areas of employment, including compensation, retirement, scheduling, work rules, and job protections.
“Our focus now turns toward implementation and enforcement of the agreement,” said Capt. Jose Nieves, chairman of ALPA’s FedEx Master Executive Council. “We will remain actively involved throughout this process and continue representing and advocating for FedEx pilots.”
The FedEx airline has slightly less than 5,000 pilots, of which 98.5% participated in the vote. Union and management negotiators reached a tentative agreement on April 16.
Pilots will receive a 40% increase in their hourly pay and other benefits, along with back pay (up to $150,000 for captains and $102,500 for first officers) to account for delayed raises during negotiations, according to a copy of the tentative agreement posted on a union website. Starting in 2028, they will receive 3% annual raises.
The relatively high disapproval level for the contract reflects the internal divide within the union membership over the negotiating strategy. In the summer of 2023, leaders on the FedEx union board advanced a tentative agreement to members that would have raised pay by 30% over five years, but they rejected it by a 57% to 43% margin. Opponents said leadership was too willing to compromise with management, resulting in a power struggle and replacement of the Master Executive Council officers.
The pilots’ union long argued that FedEx’s improved financial performance demonstrates it can afford a better compensation package.
During the fiscal-year third quarter, ended Feb. 28, FedEx revenue increased 8% to $520 billion and adjusted earnings per share jumped 16%, easily beating analysts’ expectations on strong pricing, volumes and cost reductions. FedEx raised its full-year guidance at the time and its three-year strategy calls for 14% annual profit growth by 2029.
The National Mediation Board worked for years to bring the sides together. In 2024, ALPA asked the NMB to declare an impasse and release the parties from mediation, an initial step towards being able to strike under federal labor law.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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