In a surprise maneuver last week, a rebel group of FedEx Express pilots forced union leadership to break off contract negotiations by requesting that federal authorities release the parties from mediation before the company could even respond to its latest counteroffer.
The petition to the National Mediation Board (NMB) went against advice from Air Line Pilots Association staff and the union’s governing body at FedEx’s airline, exposing the extent of union infighting that has continued since a tentative labor contract was voted down last summer.
The division has undermined the union’s negotiating credibility at a delicate moment, with growing prospects the opposition faction could move to oust the union’s current leadership.
“A holy war is about to happen in our union and the crew force. Only thing that happens in a holy war is a high body count,” said one poster on an online pilot forum.
At a special meeting of the FedEx Master Executive Council (MEC) on March 4, eight of 14 representatives used parliamentary tactics to narrowly push through a resolution demanding ALPA’s president ask the NMB to declare an impasse and offer binding arbitration to the parties. Motions to bypass original agenda items were advanced without prior notice or written material to review. The events were described in meeting memos and correspondence from union negotiators to rank-and-file pilots obtained by FreightWaves.
The representatives had requested the meeting ostensibly for the purpose of getting a briefing on talks with management. That never happened.
On Friday, ALPA announced it had formally requested to be released from mediation — a prerequisite for eventually securing the legal right to go on strike.
Union officials said the rebel group hid its true intentions until the last moment. One district council leader characterized the actions as an “ambush.”
The board representatives made the power play even as the MEC waited for FedEx (NYSE: FDX) to respond to its most recent contract proposal. The maneuver also prevented attendees from hearing an update from the federal mediator about company plans and expectations for the next negotiating session that would have helped shape the union’s decision-making on its agenda items, according to the internal bulletins.
“I expect the new majority’s next move will be to recall myself and the other officers,” said Capt. Billy Wilson, chairman of the FedEx Master Executive Council. “After this change, they have suggested that committee chairs will be removed as well. It appears control and power are goal number one, and a new tentative agreement is a goal for further down the road. Unfortunately, this will be to the detriment of the pilots they represent.
“Every day that goes by, we are losing money, and the company is saving money. That is why my number one goal has been to move us toward a highly ratifiable tentative agreement as soon as possible,” he wrote in a letter.
FedEx pilots in July rejected a tentative contract agreement worth $3.8 billion that would have raised pay by up to 30% over 4.5 years. Opponents complained about weaker job protections, back pay, alternative pension options and that pay increases were below those achieved by pilots at American, Delta, United and other airlines.
Mediated bargaining sessions resumed in early December, when ALPA presented its contract terms. The next session was scheduled for March 18, when union negotiators were to receive the company’s position on pay, retirement and parameters for when flights can be outsourced. That session and another one have now been canceled.
Wilson said that ALPA anticipated a serious response from FedEx on March 18 because the mediator had placed significant pressure on both sides to make progress toward a deal. Documents show that the biggest movement since the summer’s failed agreement was on pay and the scope of third-party outsourcing. Union negotiators agreed to drop some demands for changes in work-life balance in exchange for more money.
“This short-sighted course of action will ensure that we never know what the company was actually going to provide,” complained Patrick O’Dell, the secretary/treasurer of Council 22.
Wilson said the hard-line faction harmed pilots by circumventing the process, adding he was prepared to recommend breaking out of mediation if FedEx presented unfavorable terms next week.
“As pilots, we always gather all the information available and make informed decisions. They made a premature decision without all of the facts. This is like initiating a go-around before you start the approach because you are basing your decision on [pre-recorded airport information] from an hour ago rather than getting the current weather,” said Wilson.
FedEx officials say discord within the union has made it difficult to make progress on a contract, despite their best efforts.
Since December, ALPA has repeatedly added new agenda items to its proposals, said Pat DiMento, vice president of flight operations and training, in a Monday letter to FedEx crew members reviewed by FreightWaves.
“It appears that the ALPA negotiating committee is severely constrained at the bargaining table and that directives to the committee to include additional items, concepts and costs are aimed at impeding the process rather than allowing the parties to reach an agreement,” wrote DiMento. “In the meantime, the company has continuously bargained in good faith and has also moved in our pilots’ direction with every offer and in almost every area of importance identified by ALPA.”
Disunity among FedEx pilots has grown in recent years. A 57% majority killed the tentative contract last summer, and some pilots wanted to recall the negotiating committee. Many were upset with ALPA for being too accommodating toward FedEx, including in a 2015 contract they say eroded schedule flexibility and other quality-of-life issues.
Chatter on pilot forums suggests continued disillusionment with ALPA, especially on its ability to prevent FedEx from gradually giving more routes to third-party carriers. The new guard lost faith in Capt. Pat May, the chairman of ALPA’s FedEx negotiating committee, after he delivered what they consider a substandard labor agreement last summer and didn’t resign, as promised, when it was shot down. They believe management is stringing the pilots along because not having an updated contract saves FedEx a huge amount of money, according to several pilot.
“We went two years negotiating this contract and very little happened” when the talks were supposed to follow an expedited track, said one captain in a text message.
Many veteran pilots complain a loud minority, with unrealistic goals, is using social media to stir division and delay constructive dialogue with FedEx. They say, for example, code sharing is a reality in the airline industry and that it makes sense to outsource business on routes with limited demand. Younger pilots argue senior pilots previously voted to give away protections and benefits they enjoyed when they had less tenure.
Another pilot, who goes by the online handle Anthrax, said Wilson should be recalled and that May “failed us miserably the first time around.” He said Wilson is stirring up fear, arguing that talks are at a dead end and that it’s time for a change even if the path ahead is uncertain.
But the likelihood of a recall seems low for the moment because May told members several weeks ago that the negotiating committee will be replaced if a tentative agreement isn’t reached by the end of April.
Wilson said the hard-line faction’s action only served to raise questions in the NMB’s mind about the stability of the union and its ability to conduct negotiations under the Railway Labor Act.
Options for dispute resolution
Collective bargaining for airlines is governed under the Railway Labor Act, which is much more restrictive than general labor law. 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 next step is for the NMB to decide that additional mediation efforts would not be productive and offer the parties an opportunity to arbitrate the dispute before a special panel.
If either side declines the arbitration, both parties enter a 30-day “cooling-off” period, after which the parties can engage in self-help — a strike by the union or a lockout by management. But the U.S. president could create an emergency board at that point to investigate the labor dispute and issue a report within 30 days, stringing out the process further. 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 second cooling-off period, the parties may take action.
Arbitration in the airline industry almost never happens. The NMB last week denied a release to cargo pilots at Air Transport International, also represented by ALPA. In fact, the NMB has only allowed one airline bargaining process (Spirit Airlines) in more than 20 years to go to arbitration.
Meanwhile, the contract talks are taking place against a backdrop of falling volumes that has accelerated a streamlining effort across the Express air network, leaving the airline with hundreds more pilots than it needs. The company’s strategy includes segregating parcel and heavy freight shipments so they don’t fly together and slow down sort centers, as well as using more ground transportation, temporarily idling some freighters and retiring older aircraft.
DiMento said it would be inappropriate for the NMB to end mediated negotiations.
“It is our view that political agendas within FedEx ALPA are currently frustrating efforts to make these negotiations productive. Regardless, we have been and will remain ready to bargain in good faith in the hopes of reaching an agreement that benefits everyone,” he told flight crews.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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