FedEx Ally Blocks Aviation Measure in Fight With UPS (Update1)

March 6 (Bloomberg) -- Senator Bob Corker, who represents FedEx Corp.’s home state of Tennessee, said he will block legislation funding the Federal Aviation Administration because a provision may be added later making it easier for workers at the company to join unions.

Corker’s action extends a years-long fight in Washington between the mostly non-union FedEx and its unionized rival United Parcel Service Inc. over how workers at both companies should be treated under U.S. labor laws.

“We are supportive of the Senate FAA bill, but we have placed a hold until we can be assured that the controversial FedEx provision will not be included in the final legislation,” Laura Lefler Herzog, a spokeswoman for Corker, a Republican, said today in an e-mailed statement.

A version of the $53.5 billion FAA measure passed by the House last year would place the FedEx workers under the same federal labor law that covers UPS employees represented by the Teamsters union. That law lets workers vote locally to join unions rather than being forced to conduct a national union election.

While the measure awaiting Senate action doesn’t include the labor language, FedEx and Corker want to be sure the provision doesn’t make it into an eventual reconciliation of the House and Senate bills.

Senate leaders usually seek to reach an accord with a senator putting a hold on a bill. Lawmakers can overcome objections from individual lawmakers with 60 votes, though that process can take several days.

One Senator’s Power

The power of a single member to block legislation in the Senate was demonstrated most recently by Senator Jim Bunning, a Kentucky Republican, who held up action on a $10 billion bill extending unemployment benefits from Feb. 25 until March 2. Once Bunning agreed to permit a vote, the bill passed 78 to 19 and was signed by the president.

Memphis, Tennessee-based FedEx is the world’s largest cargo airline. UPS, the world’s largest package-delivery company, is based in Atlanta.

UPS said the House-passed provision would even the playing field for UPS’s union workforce. The company is the biggest employer of Teamsters, with about 240,000 workers. The Teamsters have been trying to organize FedEx ground workers for years.

“UPS clearly wants the FAA bill to move forward in the Senate and thinks it’s unreasonable to be held up for reasons that aren’t even in the Senate bill,” said Malcolm Berkley, a UPS spokesman. The House bill’s labor provision “removes special treatment currently provided to FedEx under the current application of the law,” he said.

‘UPS Bailout’

FedEx said the union provision would raise its costs, amounting to a bailout of competitor UPS by Congress. Pilots, who belong to the Air Line Pilots Association, are the only major worker group represented by a union among FedEx’s 290,000 employees and contractors.

“The House version of this legislation contains a UPS bailout provision that clearly favors one competitor at the expense of another,” said Maury Lane, a FedEx spokesman. “We support efforts to stop this bailout, and ensure that competition is decided by consumers in the marketplace, not in the halls of Congress.”

FedEx rose 59 cents to $86.95 yesterday in New York Stock Exchange composite trading and has climbed 4.2 percent this year. UPS increased 29 cents to $59.49 and has risen 3.7 percent this year.