Its good to see Fedex Drivers are smarter than UPS Drivers.




Teamster Local Union 177 Loses Election at FedEx; NLRB
Found Contract Drivers Were Employees
February 23, 2005. Contract drivers at a FedEx Ground Systems Inc. facility in Fairfield, N.J., have voted against representation by the International Brotherhood of Teamsters, according to the National Labor Relations Board. 

With approximately 45 eligible voters, the drivers voted 34-10 against certifying Teamsters Local 177 as their collective bargaining representative, Gary Kendellen, director of NLRB Region 22, told BNA Feb. 17. There were nine challenged ballots. The election took place Dec. 3, but the ballots were impounded until Feb. 10 because of a dispute over whether the drivers were employees or independent contractors for the purpose of the National Labor Relations Act. 

Kendellen ruled Nov. 2 that the voting unit should include drivers who conduct pickups and deliveries at local customers, as well as "linehaul" drivers who move packages between FedEx Ground hubs and terminals. Although they are contractors, Kendellen concluded that the drivers are employees in part because they form an essential part of the company's operations, their work schedules preclude conducting significant commercial activity, and there are limited entrepreneurial opportunities for them. 

The NLRB denied the company's request for review in an unpublished Jan. 26 decision, saying FedEx Ground failed to raise any substantial issues warranting review (FedEx Group Package System Inc., N.L.R.B., No. 22-RC-12508, unpublished decision 1/26/05). 

"In this one particular instance, [the vote] didn't go our way, but the broader issue did go our way," Victor Palumbo, secretary-treasurer of Local 177, told BNA Feb. 17. "It certainly opens the door" for the union to attempt to organize other FedEx Ground units, he added. 

IBT does not currently represent any FedEx employees, including its ground and air operations, according to an IBT representative. 

"We are certainly pleased at the outcome of the vote and committed to the independent [contractor] model and to defending it," David Westrick, a FedEx Ground spokesman, told BNA Feb. 17. 

Petition Filed in July

Local 177 filed a representation petition with the NLRB in July 2004. Palumbo told BNA certain drivers told the union they were "not getting all the benefits of being independent contractors," while still not enjoying the benefits hourly employees had. 

At the time of an August 2004 hearing, FedEx Ground employed approximately 31 local drivers and two linehaul drivers at the Fairfield facility, as well as two "swing" drivers who covered for absent local drivers, Kendellen said. Each driver must sign an equipment lease and operating agreement identifying him or her as a contractor willing to provide daily service on behalf of FedEx Ground. 

Local drivers are compensated for each stop they make, each package picked up and delivered, and for mileage. They also receive a daily payment for making their vehicle available, performance bonuses, and other payments. Linehaul drivers receive mileage, payments for assembling and disassembling tractor-trailers, bonuses, and other compensation. None of the drivers receive paid vacations or holidays. 

In his decision, Kendellen noted that NLRB has addressed the question of whether the local pickup and delivery drivers at Roadway Package Systems--FedEx Ground's predecessor company--were employees or independent contractors on three occasions. In each case, the board found the drivers were employees. 

In this case, the local drivers do business in FedEx Ground's name, wear its uniforms, drive vehicles bearing its colors, and obey its physical appearance and grooming standards, Kendellen said. In addition, they go through FedEx Ground training courses and operate with the company's assistance and guidance. FedEx Ground determines the customers on their routes, acts as the arbiter of when they pick up and deliver packages, and loads their trucks. Although the drivers own or lease their vehicles, the company provides replacement vans when those vehicles are out of service. 

Limited Propriety Interest

FedEx Ground asserted that it has made a number of changes in its relationships with its local and linehaul drivers since those decisions. In particular, the employer said drivers now have a "proprietary interest" in their routes. But Kendellen said the conclusion NLRB reached in Roadway Package Systems, 326 NLRB 842, 159 LRRM 1153 (1998), still applies. In that case, the board found the company had shifted certain capital costs to drivers without providing them with the independence to engage in entrepreneurial opportunities. 

Kendellen found that none of the local drivers engage in significant outside business. Their FedEx Ground schedules--generally 60 hours per week--take up the entire allotment of commercial driving allowed by federal regulations. They may not engage in outside activity while driving their routes or wearing their FedEx Ground uniforms. Although the employer does not officially establish start times, the company's operational schedule limits the drivers' flexibility in setting their schedules. 

As for their proprietary interest in their routes, individual customer accounts are established with FedEx Ground, not the drivers. The company regularly reconfigures drivers' routes, changing the payments drivers receive. This also reduces the drivers' ability to sell their routes, as does the fact that the company makes new routes available for free. FedEx must approve any buyer a driver finds for his or her route. 

"The meaningfulness of the proprietary interest that a driver has in his or her route is additionally constantly compromised by the Employer's ongoing contemporaneous choices not to also buy or sell any of the routes that come into its possession," such as when drivers resign or are terminated, Kendellen said. There was little evidence, he added, that drivers have realized significant profits from selling their routes. 

Although FedEx asserted that all drivers were independent contractors, it said that if the linehaul drivers were found to be employees, they should be included in the same unit as local drivers. The Teamsters also sought a single unit. Kendellen indeed found that the local and linehaul drivers shared a community of interest, as did the swing drivers. 

Robert Fagella, an attorney with Zazzali, Fagella, Nowak, Kleinbaum & Friedman in Newark, N.J., who represented the Teamsters, said that "in a perfect world," the drivers might have had a proprietary interest in their routes. However, in practice, he compared their ability to sell those routes to the chances of buying "a winning lottery ticket" because they came along so rarely. 

Michael J. Murphy, an attorney with Ogletree Deakins in Washington, D.C., who represented FedEx Ground, was unavailable for comment Feb. 17. 

By Eric Lekus, BNA Daily Labor Report  

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