Union leaders representing Federal Express pilots said late Friday they will seek authority from members to call a strike when legally permissible. But no imminent work action can happen because the federally controlled negotiating process still has a long way to go.
The Air Line Pilots Association said voting for strike authorization will begin Tuesday. Getting rank-and-file permission to call a strike is a common union tactic that typically gives its bargainers more clout at the negotiating table. The pilots are frustrated by what they perceive as slow progress over two years.
The FedEx (NYSE: FDX) pilots’ contract became eligible for changes in November 2021, although talks began six months earlier. Management and the union have been bargaining through the auspices of the National Mediation Board for the past seven months after direct negotiations failed to produce an agreement. Officials say they have resolved retirement and quality-of-life issues but are still at odds over pay levels.
“At a time when our pilots should be joining our company in celebration of its 50th anniversary, we are instead forced to apply additional pressure to management in an effort to secure a new contract,” said Capt. Chris Norman, chair of the FedEx Master Executive Council.
“We do not make a decision like this lightly, but we intend to send a strong and unified message to management that our pilots are willing to go the distance to achieve the contract we have earned.”
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 remains focused on reaching a comprehensive agreement. With that in mind, we remain 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. “ALPA’s call for a vote of its members has no impact on our service as we continue delivering for our customers around the world.”
Several factors are influencing each party’s bargaining position and relative power.
Amid the COVID crisis and supply chain disruptions two years ago, e-commerce and air cargo were in extremely high demand and all-cargo operators enjoyed unrivaled profits. But e-commerce and international growth cooled off significantly last year.
The softness in volume combined with an underutilized infrastructure network contributed to significant declines in operating income in the fiscal year first quarter and stirred management to implement a $6 billion cost-cutting and restructuring campaign. That includes parking aircraft, flying fewer flights and outsourcing more airlift to third parties.
The restructuring is impacting pilots with closure of pilot bases, forced downgrades that equate to a pay reduction and potential job cuts if the airline shrinks, ALPA said.
And there is always the prospect of federal intervention that could prevent the union from getting everything it seeks through collective bargaining. In December, President Joe Biden signed legislation requiring all freight rail unions to ratify the labor agreement that union and railroad negotiators had reached in September.
UPS pilots last year ratified a two-year contract extension.
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