FedEx's Smith `Misleading' Public on Air-Safety Legislation, Oberstar Says

FedEx Corp. Chief Executive Officer Fred Smith is misleading the public on air-safety legislation and “bought his way” to be covered by a 1996 labor law that helped his company, a House committee chairman said.

U.S. Representative James Oberstar, a Minnesota Democrat and chairman of the House Transportation and Infrastructure Committee, rejected Smith’s characterization that a labor measure the chairman wrote is holding up aviation-safety legislation.

Smith is “peddling a false image” of the bill’s status, Oberstar told reporters today on a conference call after meeting relatives of victims in a Colgan Air crash who are pushing for action on the measure. “He ought to be telling the truth rather than misleading the public.”

FedEx, the second-largest U.S. package-shipping company, is fighting United Parcel Service Inc. and unions over Oberstar’s legislation that would treat FedEx workers on the ground the same as similar UPS employees in labor organizing. UPS is covered by a law that lets workers vote locally to join unions.

UPS, the biggest employer of Teamsters with about 240,000 union members, backs the Oberstar legislation. Pilots are the only major group represented by a union among FedEx’s 290,000 employees and contractors. The Teamsters have been seeking to organize FedEx ground workers for years.

Oberstar said Smith “bought his way into this position” by persuading Congress in 1996 to enact legislation ensuring the workers in FedEx’s Express unit are classified under a law that applies to airlines and requires national organizing campaigns rather than local votes.

‘Worked His Way’

Oberstar, in response to a question about Smith’s campaign donations to supporters of the provision, said Smith “worked his way around the Senate” on the 1996 law.

Maury Lane, a spokesman for Smith, said, “Chairman Oberstar could get a better understanding of Mr. Smith’s concerns if he held a congressional hearing or took public input on the impact of this UPS bailout legislation.”

A proposal that would reclassify the FedEx drivers under the National Labor Relations Act passed the House last year in a $53.5 billion funding bill for the Federal Aviation Administration.

The Senate’s FAA measure passed in March without the provision, meaning the Senate version would keep FedEx drivers classified under the Railway Labor Act. Differences must be resolved before the FAA legislation becomes law with President Barack Obama’s signature.

Oberstar said lawmakers can settle their differences, including those over the labor provision, and enact the FAA legislation into law by July 4.

The crash of the flight by Colgan, a unit of Pinnacle Airlines Corp., left 50 people dead and led to aviation-safety provisions being added to the FAA bill. Relatives of family members who died in the crash have been meeting with lawmakers urging final enactment of the legislation.

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net

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