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A Project of The Annenberg Public Policy Center

‘Brown Bailout’? Hardly

Last month, FedEx launched a multimillion-dollar online campaign against longtime rival United Parcel Service over a Federal Aviation Administration reauthorization bill making its way through Congress. FedEx says a provision of the bill, as passed in the House, amounts to a “bailout” for UPS. But that’s an abuse of the term.

The measure would bring drivers and other non-airline-based employees of FedEx’s Express division, which handles “time-sensitive shipments,” under the coverage of the National Labor Relations Act, instead of the Railway Labor Act. Under the NLRA, the FedEx workers would be able to unionize locally, on a site-by-site basis, instead of nationally as required by the RLA. Unionizing, in other words, is somewhat easier under the NLRA.

UPS workers, specifically its drivers, fall under the NLRA and are members of the International Brotherhood of Teamsters. UPS argues that FedEx Express workers who perform the same duties should fall under the same regulations. But FedEx, which founded its Express division in 1971 as an airline company, says it should remain under the RLA, which covers airlines and railroads.

UPS argues that the proposed amendment “will appropriately provide equal treatment under labor law to employees performing the same functions at different companies, and will eliminate the special treatment currently given to FedEx Express.” FedEx says that “[r]emoving FedEx Express from RLA jurisdiction could expose our customers at any time to local work stoppages that interrupt the flow of their time-sensitive, high-value shipments through our global network.”

FedEx has taken its case to the Web,  misappropriating a term with which the public has largely negative associations and applying it to what UPS is trying to convince Congress to do. FedEx’s new Web site, brownbailout.com, attacks UPS for pandering to Congress and says UPS wants “a bailout, plain and simple, and the American people won’t stand for it.” A running tab on UPS’ revenue called the “Bailout-O-Meter” asks: “Why does a company that brings in this much money need a bailout from Congress?” And videos on the FedEx–sponsored site lampoon UPS commercials that feature a man explaining the benefits of using UPS through illustrations on a white board. The FedEx videos feature a man called the “Brown Bailout Guy,” who resembles the actor from UPS’ own commercials. In one video, he’s walking near the U.S. Capitol, asking, “Where’s my bailout?”

But does the legislative change that UPS wants amount to a bailout? Not in the traditional sense and certainly not in the way the American public has heard the term used in recent months. UPS isn’t seeking any money from the federal government because of financial losses. Even Washington Post syndicated columnist George Will, who is taking FedEx’s side in the dispute, says that what UPS is advocating doesn’t amount to a traditional bailout.

Will: “Bailout” is now both a noun and a verb, and FedEx characterizes what Congress might do for UPS as the “Brown Bailout.” But properly used, “bailout” denotes a rescue of an economic entity from financial distress.

Although UPS is suffering from the recession, so is FedEx. Furthermore, UPS, whose revenue is 36 percent more than FedEx’s, began advocating this injury to FedEx long before this recession.

The issue now moves to the Senate, where that body of Congress will take up legislation that does not include language that would authorize the regulatory switch. But this will almost certainly come up during a House and Senate reconciliation of their respective versions of the bill.

We are not taking sides in the matter one way or the other. Whether FedEx Express workers should be governed by the RLA or the NLRA is not an issue for us to decide. But FedEx is wrong in this regard: What UPS is asking for is no bailout.