In November 1995, however, the National Mediation Board issued its opinion, holding that all Federal Express employees were covered under the Railway Labor Act and station in part:
… Federal express is an air express delivery service which holds itself out for hire to transport packages, both domestically and internationally … [T]here is no dispute over whether Federal Express is a common carrier by air … The [Railway Labor] Act’s definition of an employee of an air carrier includes, “every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service. “The Railway Labor Act does not limit its coverage to air carrier employees who fly of maintain aircraft. Rather, its coverage extends to virtually all employees engaged in performing a service for the carrier so that the carrier may transport passengers or freight.
Employees working in the … positions sought by the UAW perform functions equally crucial to Federal Express’ mission as an integrated air express delivery service. As the record demonstrates, without the functions performed by the employees at issue, Federal Express could not provide the on-time express delivery required of an air express delivery service. (12)
The board suggested that ruling otherwise would break off parts of labor forces at railroads and airlines around the country and “drastically alter labor relations” at all these companies. Even if some employees do not work with airplanes, if a company is classified as an “air carrier, “ all its workers should be covered by the Railway Labor Act, not just some of them.
The National Mediation Board opinion was sent to the National Labor Relations Board, which took it under consideration and continued to deliberate. The situation now was that the NLRB could still reject the National Mediation Board’s opinion to allow the UAW to organize FedEx employees under the NLRA. This was a threat to the anti-union stance of FedEx management.
(11) (Federal Express Corp., 317 NLRB 1155 (1995).
(12) (Federal Express Corporation, 23 NM 32, November 22, 1995
Deleted Wording
Quickly, another threat arose for Federal Express when, a month later, Congress passed the Interstate Commerce Commission Termination Act of 1995. This law ended the existence of the nation’s first independent regulatory commission 108 years after its creation. The Interstate Commerce Commission (ICC) was set up in 1887 to regulate railroads, and over the years its authority had been expanded so that it also regulated trucking companies, bus lines, moving companies, freight forwarders, and coal slurry pipelines. In the 1970s and 1980s, the duties of the ICC had been considerably reduced as Congress mandated deregulation in these industries and agency appropriations were cut by more than half. Eventually, the agency had withered so much that Congress passed an act to move its remaining powers to the surface Transportation board, a small entity in the department of Transportation.
The termination of the ICC was a complex legislative process because, over the years, Congress had passed twenty-two major statutes for the agency to administer and, in a addition, had repeatedly amended the original Interstate Commerce Act. A bill had to be written in which all these laws were rescinded, rewritten, or amended.
When the ICC Termination Act was sent back to both chambers and passed in 1995, it struck the words “express company” from the original ICC Act and, in a conforming amendment, dropped those words from the Railway Labor Act as well. Legislators paid little attention to the change and Federal Express seems not to have noticed it. Republicans would later claim that it was a mistake to be corrected with a technical amendment. Democrats would argue that reinserting the language was a substantive change for the benefit of a special interest.
Once alerted, Federal Express badly wanted the language put back in the law because the words “express company” represented added assurance that its truck drivers sere covered by the Railway Labor Act. (13) If the National Labor Relations Board, in its pending decision, ruled that some employees were not protected form union-friendly organizing because they worked for an “air carrier,” then FedEx could argue for reclassification as an “express company.”
(13) (Frank Swoboda,” Labor Wants to End FedEx’s Railway Act Protection,” The Washington Post, October 2, 1996, p. C1.
For many years, FedEx had been arguing to the National Mediation Board that it was both an “air carrier” and an “express company.” The Board had never accepted this argument, but it might in the future. The company resolved to get the words back into the law when Congress reconvened early in 1996.
Federal Express Mobilizes
Federal Express is exceptionally skillful at exerting political influence in Washington, D.C. It does not shrink from pressing for government actions that benefit its operations. For example, in 1990 it got congress to exempt its aircraft from local noise abatement requirements. In 1994 it supported an amendment to an aviation bill that ended the authority of states to regulate the routes and services of its planes and trucks. In 1995 it succeeded in eliminating federal safety requirements for trucks in the 10,001-to-26,000-pound range, the kind of trucks driven by most of its employees. (14)
Federal Express lobbyists approached Republican congressional leaders at the start of the second session of the 104th Congress in 1996 and requested amendment of the Railway Labor Act to restore the words “express company.” They argued that omission of these words was just a mistake because elsewhere the ICC Act stated that “the enactment of the ICC Termination Act of 1995 shall neither expand or contract coverage of the employees and employers by the Railway Labor Act.” Therefore, reinsertion of the words was a harmless correction with no effect on the status quo.
When organized labor discovered what Federal Express was up to, its lobbyists called on labor-friendly House members of both parties to fight the change. It did not see the change as a minor technical amendment; rather, it saw a potential roadblock to organizing FedEx employees.
Five attempts to reinsert the words during the session failed. The Republicans never sent the amendment to a standing committee for discussion and never held any hearings. Instead, they tried to hook it on as a rider to unrelated legislation. In the House, they attached it to the fiscal year 1995 omnibus appropriations bill and it was voted down. They attached it to the National Transportation Safety Board reauthorization bill and it failed. They attached it to a bill amending the Railroad Unemployment Act and if failed. They attached it to the Department of Transportation appropriation bill and it failed. In the Senate, they attached it to a Department of Labor appropriations bill and it failed again.
(14) (Public Citizen press release of October 2, 1996, cited in the Congressional Record, October 2, 1996, p. S12189.
Five defeats might have discouraged another company, but not Federal Express. The company knows how to orchestrate a range of tactics to sway politicians. It uses its fleet of corporate jets to fly members of the House and Senate to fundraising dinners around the country. Under the rules of Congress, the lawmakers have to pay the equivalent of first-class fare on a schedule airline when they fly on a FedEx plane, but they are nonetheless grateful. Two former senators sit on the company’s board of directors, former Republican leader Howard H. Baker Jr. and former Democratic leader George J. Mitchell.
Federal Express lobbies aggressively. Chief executive Frederick W. Smith visits Capitol Hill to see members of Congress in person. The company has a Washington office and also hires lobbyists in Washington law firms for special jobs. In just the first six months of 1996, it had spent $1,149,150 on lobbying activity, and $367,000 of this went to nine outside firms, some of which were hired to help with the Railway Labor Act amendment. (15)
Washington Law Firms Hired by Federal Express
Here is a list of the firms hired by Federal Express in the first six months of 1996 and the fees paid to them. Firms hired to work on the Railway Labor Act are shown with an asterisk.
Oldsker, Ryan, Phillips & Utrecht $80,000
The Dutko Group* 60,000
O’Brien Calio 60,000
Cassidy & Associates 42,000
Aun Eppard Associates 40,000
Washington Counsel, P.C. 40,000
Cliff Madison Government Relations* 20,000
Bill Simpson & Associates 15,000
James e. Boland* 10,000
Source: Public Citizen From Senate records and printed in Neil a. Lewis, “This Mr. Smith Gets His Way in Washington, “New York Times, October 12, 1996, p. B1.
Federal Express is also a very large campaign contributor. Among corporations, it has one of the largest political action committees. In 1995 and 1996, its PAC gave $948,000 to senators and representatives of both parties, and the company itself gave $400,000 in soft money to the Republican National Committee and $250,000 to the Democratic Senatorial Campaign Committee. (16)
(15) (Neil a. Lewis, “This Mr. Smith Gets His Way in Washington, “New York Times, October 12, 1996, p. B1.
(16) (contribution Figures are from Federal Election Commission, Political Action committee Report, 1995-1996 Cycle, Contributions, FEPAC; and Bob Woodward and Ann Devroy, “When Mr. smith Came to Washington, “Washington Post National weekly Edition, august 25, 1997, p.12.
The final Push
As the end of the second session of the 104th Congress approached, another effort was made to restore “express company” to the Railway Labor Act. Both the House and the Senate had passed a Federal Aviation authorization bill with broad, bipartisan support. In addition to $19 billion in funding for Federal Aviation Administration (FAA) programs and increased airport security, the bills also mandated %4.6 billion in grants for airport construction projects in the districts of representatives and senators. This meant more jobs and votes back home.
When separate bills are passed by the House and Senate, a conference committee composed of the principal sponsors form each chamber meets to iron out differences in wording. The committee then reports one uniform version of the bill back to each chamber for final approval.
In the September 1996 conference committee meeting on the aviation bill, Senator Earnest Hollings (D-S.C.) added an amendment that reinserted “express company’ in the Railway labor Act. Sen. Hollings was indebted to Federal express because, when a drought had hit South Carolina, FedEx planes flew in loads of hay to prevent cattle from starving. The company’s PAC had also made two $2,000 campaign contributions to Hollings in the two previous months. (17) The conference committee approved Hollings’ amendment by a vote of 8-6. Thus, when this enormously popular bill was reported back to the House and Senate for enactmen6t, it contained the Hollings amendment.
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