FedEx pilots empower union leaders to call a strike

ALPA said pilots are working under contractual provisions and benefits negotiated in 2015. Officials say they have resolved retirement and quality-of-life issues but are still at odds over pay levels.

The strike authorization is a tactic to put pressure on FedEx (NYSE: FDX) management, but any potential work stoppage is a long way off.

Under federal rules designed to prevent work interruptions in critical interstate commerce, workers are prohibited from striking and companies from locking out workers until a lengthy series of bargaining steps, including federal mediation, are completed.

The federal mediator has the power to hold the parties in mediation indefinitely. The negotiation process can take more than a year at this stage.

If no progress is made, the National Mediation Board (NMB) at some point may release the union to a 30-day cooling-off period during which negotiations can still take place but no strike or lockout can occur.

If the NMB determines the parties have reached an impasse, it can propose that the remaining issues be sent to a special panel for binding arbitration. Arbitration in the airline industry is rare because both sides must agree to it. 

The law allows the president to create an emergency board to investigate a labor dispute and issue a report within 30 days if the parties reject binding arbitration. That is followed by another 30-day period to consider the board’s recommendations and reach an agreement. If no agreement is reached at the end of the cooling-off period, the parties may take action, such as a strike or lockout. 

“FedEx is focused on reaching a comprehensive agreement and remains committed to bargaining in good faith with our pilots to achieve an agreement that is fair to them, our other team members, and all other FedEx stakeholders,” the company said in a statement. “The result of ALPA’s strike authorization has no impact on our service as we continue delivering for our customers around the world.”

Negotiations are taking place against a backdrop of declining shipping volumes and profits at FedEx, which has instituted a multibillion dollar cost-cutting plan that includes closing a handful of pilot bases, as reported by FreightWaves. The union says pilots are worried that flight reductions are reducing the most lucrative routes for pilots and that there could be job losses if FedEx shrinks its fleet.

An increase in pay rates would increase costs for FedEx just as it’s trying to rightsize its global air and ground network. 

Pilots and several U.S. airlines have been unable to reach agreement on new contracts. Cargo airline Air Transport International and its pilots are also negotiating with the help of federal mediators. Pilots at United Airlines and American Airlines turned down contracts negotiated by union leaders in hopes of matching the deal Delta Air Lines pilots received early this year. Southwest Airlines’ pilots also authorized a strike.

Click here for more FreightWaves and American Shipper articles by Eric Kulisch.

Contact Reporter: ekulisch@www.freightwaves.com

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