Misclassification of FedEx Workers

FedEx Ground improperly classifies it’s drivers as independent contractors and is embroiled in numerous federal and state investigations and dozens of private lawsuits over this practice.  Various federal and state government agencies and court decisions have concluded that these drivers are in fact misclassified FedEx Ground employees.  As a result, FedEx Ground illegally denies workplace protections and the right to form a union.  In addition, states and the federal government lose millions of dollars in tax revenue due to this practice.

By misclassifying workers as independent contractors, companies avoid withholding income taxes and paying Social Security and Medicare taxes.  To be eligible for Social Security and Medicare, the worker has to pay both the employer and the employee shares of those payroll taxes – double what regular employees pay (15.3 percent vs. 7.65 percent).

Each year, more than $4.7 billion in federal income and employment tax revenue is lost due to misclassification and billions more are lost at the state level.

The egregious practice of misclassification also hurts responsible employers who pay their workers related taxes, provide basic workplace protections to employees and respect their workers’ right to join a union.  Companies that misclassify their workers save up to an estimated 30% in payroll costs, gaining an unfair advantage over their more responsible competitors.  Irresponsible companies meanwhile, are subsidized by law-abiding employers in the form of health insurance premiums.

Workers misclassified as independent contractors receive no protection from workplace health and safety laws, no legal rights to equal opportunity in the workplace, no rights to job-protected family and medical leave and no rights to organize and collectively bargain.  Even veterans lose their right to be re-employed after returning from military service.

AT THE STATE LEVEL

FedEx Ground is involved in approximately 45 class-action lawsuits, several individual suits and more than 30 states have initiated investigations or proceedings against the company based on FedEx Ground’s owner-operator contractor model.  At this time, many state proceedings have remained confidential.  The Teamsters Union is working with policy-makers in state Capitols throughout the country to crack down on this egregious practice through increased worker protections and stiffer penalties against FedEx Ground and other irresponsible companies.

AT THE FEDERAL LEVEL

The Teamsters Union is working with our allies in the House and Senate to address misclassification in the 111th Congress.  The issue is expected to be discussed later this session.

The International and it’s Local Unions have been contacted by various FedEx Express workers seeking

Teamsters Union help in forming a union.  We are responding, including undertaking an organizing campaign at FedEx.   We are endorsing “Express Carrier” legislation in Congress that would properly classify FedEx workers under the correct labor statutes so they can exercise their rights to form a Union.  We are also joining in the fight against the misclassification of FedEx drivers as independent contractors on the state and federal level.

Every Local Union is committed to this fight.  We must raise the standard for all employees.  This campaign will help those represented already by the Teamsters Package Delivery and Freight Workers Union.

We can organize FedEx workers and we will.  Follow this link to the IBT and click “campaigns” then “FedEx”.  Also, read the articles below regarding the FedEx Campaign and the Express Carrier Employee Protection Act.

Express Carrier Employee Protection Act

A bill to reauthorize the Federal Aviation Administration, H.R.915, includes a provision knows as the Express Carrier Employee Protection Act.  The bill, introduced in the US House of Representatives in February, has already been approved by the House Transportation and Infrastructure Committee; a companion bill in the U.S. Senate is expected to be introduced in May.

This measure will properly place non-FAA licensed FedEx Express workers (drivers, sorters, truck mechanics, package delivery drivers) under the National Labor Relations Act.  These workers would then be able to organize on a local basis.  Currently, because they are covered by the Railway Labor Act, they must organize into a nationwide bargaining unit.

FedEx Express Workers requiring an FAA license because they work on aircraft will remain under the Railway Labor Act (RLA).  These workers would form their unions nationally.  The Teamsters have conducted successful RLA campaigns in the past, including the United Airlines mechanics victory in 2008.

This measure is integral to the FedEx campaign and the Teamsters are working toward getting this measure signed into law.  Letter writing campaigns continue with FedEx workers writing to members of Congress.  In addition, workers from around the country have visited Capitol Hill to garner support for the provision.

Let Your Member of Congress Know that You Support the Express Carrier Employee Protection Act

Hi, my name is  _______________  and I am a Teamster calling from your district.  May I ask with whom I am speaking?  I am calling to voice my support for the Express Carrier Employee Protection Act, which is a part of the FAA reauthorization bill (H.R. 915).  I support it because every worker deserves the right to be properly classified and be able to form a union.  I would like to ask Senator ______ to support the Express Carrier Employee Protection Act as well.  Thank you for your time.

Please call the U.S. Senate switchboard at (202) 224-3121 to be connected to your senator.

Call Script

Sample Letter to Congress

Please handwrite or put on your local union letterhead.

Dear Representative/Senator ___________________;

I am writing to ask for your support of the Express Carrier Employee Protection Act that is attached to the FAA Reauthorization Bill (H.R. 915).

Most of the employees at FedEx have little or nothing to do with aircraft operations, but because of a legislative loophole that affects one company, FedEx, they are unfairly placed under the wrong labor laws.  The result is that the employees are deprived of the right to join or form a union in the same manner as similarly situationed employees working for other freight and package delivery companies.  Over the years, Fed Ex has transformed itself into a multi-faceted transportation company that relies in large measure on trucks to deliver its packages.  Most of it’s employees, truck drivers, truck mechanics, package handlers, couriers and other non FAA licensed employees – never touch an airplane, yet they are subject to the Railway Labor Act.  If they worked for any other company in the United States, they would be subject to the National Labor Relations Act.

I ask you to help to properly classify the FedEx workers, so that they can exercise their right to organize under the appropriate laws; licensed air employees under the Railway Labor Act and all non-licensed employees under the National Labor Relations Act. 

No company should be able to hide behind a special deal just to prevent its employees from forming a union.  In the interest of fairness, competitiveness in the package-delivery industry and protecting the rights of workers to organize, I ask for your support of the Express Carrier Employee Protection provision attached to the FAA Reauthorization Bill.

Sincerely,

Name

Address

Phone Number

Email

_______________________________________________

Website to find Senator:  http://www.senate.gov/general/contact_information/senators_cfm.cfm

Website to find Representatives:  https://writerep.house.gov/writerep/welcome.shtml

FedEx Mechanics Organizing Campaign Summary

The Teamsters have been working with a large group of FedEx aviation mechanics and related workers to help them form a  union.  This group has more than 5,000 workers at more than 500 locations located in all 50 states and Puerto Rico.  This organizing campaign currently falls within the Railway Labor Act.  The main job tittles covered in this unit are: airline mechanics, truck mechanics, vehicle mechanics, electricians, HVAC, IT, grounds maintenance and fuelers.

These mechanics and related workers have seen a steady erosion of their benefits and work rule changes that include:

1. •A pension grab that seriously erodes the retirement security of most workers while giving high-level management more cash when they retire.  401(k) matches have been eliminated.
   

2. •Health Insurance costs are going up while quality and coverage is declining.
   

3. •The job security of these workers is at great risk due to outsourcing of their work.
   

4. •The work rules and work procedures change at the whim of managers.
   

These reductions have taken place while the company has reaped record profits and the CEO and high-level managers have paid themselves million of dollars in compensation.

The company has repeatedly violated workers’ legal and human right to form a union.  The Teamsters have uncovered a series of high-level corporate union avoidance manuals and efforts.  Workers have been subjected to coercion, ridicule and discrimination for supporting the Teamsters.  In the past few months a Blue Ribbon Commission, consisting of U.S. Rep. Linda Sanchez, D-California, Los Angeles Councilman Bill Rosendahl and United Methodist Church Bishop Mary Ann Swenson have issued a report, “Keeping FedEx Jobs In The Middle Class in Los Angeles” which finds: “FedEx appears to have repeatedly denied workers’ freedom of association, thereby diminishing workers’ ability to maintain and improve middle class standards.”

Despite company abuse the FedEx mechanics continue to fight to form their union with the Teamsters.  At this time, the mechanics are working with the Teamsters to pass the Express Carrier Employee Protection Act.  This would take away the special deal currently enjoyed by FedEx that creates bargaining units at FedEx that are set up to avoid unionization.  The mechanics have joined this fight by writing more than 550 letters to members of Congress so far and by personally meeting with members of Congress or their staffs to explain why passage of the legislation is so important.  If the Express Carrier Employee Protection Act is passed, it will give the mechanics and the 90,000 other FedEx Express workers a realistic opportunity to form a union.