PHILADELPHIA – In December, when Santa contracts out some of his package-delivery work, drivers at FedEx fly down the highways, typically starting before sunrise and finishing long after dark.
But this year, some of the reindeer are so unhappy that they have voted to unionize.
About two dozen south New Jersey drivers are poised to become the first in the nation to succeed at forming a collective-bargaining unit, over the objections of FedEx Corp., the package-delivery company based in Memphis, Tenn., that had revenue last year of $29.4 billion.
Their efforts continue even with FedEx in its busiest season, moving as many as 8.5 million packages daily.
The drivers’ hours are long, their pay is low, they say, and some who work or have worked at the FedEx Ground division’s depot in Barrington, N.J., complain that their managers routinely threaten to take away their routes.
“If you get to eat lunch, you’re lucky,” said Mike Tofaute from Medford Lakes, N.J., a leader of the drivers’ association. Tofaute keeps an empty juice bottle in his truck so he doesn’t have to stop to use the bathroom. On Wednesday, he had to deliver 167 packages at 134 stops.
“What we’ve done is groundbreaking, no matter how you look at it,” Tofaute said. “To take on a company like FedEx. … There were just 28 guys and we prevailed.” The drivers voted, 14-8, to unionize, but the results are being contested.
The union push comes even as a federal lawsuit coalesces over whether drivers for the FedEx Ground division are employees or independent contractors, as the company argues.
In July, a state court in California ruled that drivers there were FedEx employees and later awarded 200 of them $5.3 million in damages to compensate them for business expenses they had paid, such as truck insurance. FedEx filed an appeal this month.
On its Web site, FedEx Ground vows to fight the lawsuit and says the truck drivers are independent contractors who run their own businesses and can gross $80,000 to $120,000, before they pay for their trucks and gasoline.
“Each of these contractors runs independent businesses,” FedEx Ground spokesman Perry Colosimo said.
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The Barrington drivers’ story touches on two important aspects of labor management – the unionization of target companies and the often complicated definition of independent contractors.
In 2000, for example, Microsoft Corp. paid $97 million to settle a case involving the classification of employees as independent contractors.
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Whether a driver is an independent contractor becomes a key issue in unionization. Employees are entitled to unionize, but independent contractors are not.
“As a tactic of avoiding unionization this is very effective,” said Philip Harvey, an assistant professor who specializes in employment law at Rutgers University in Camden, N.J. Organizing is much more difficult, Harvey said, “if it is not clear who the employee is.”
Labor organizations such as the AFL-CIO have long counted FedEx, along with Wal-Mart Stores Inc. and Comcast Corp., as a priority for unionization. The firms are nationally prominent, and their businesses are in competition with unionized companies.
FedEx competes directly with United Parcel Service Inc. and DHL, whose drivers are employees represented by the Teamsters.
“With DHL and UPS treating drivers the way they should treat them, it puts them at a disadvantage,” said David McMahon, of Deptford, N.J., a former FedEx driver who says his contract was terminated for union activism at the Barrington depot.
Colosimo would not comment on McMahon’s situation.
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FedEx, McMahon said, gets a delivery fleet without having to buy trucks, gasoline or insurance. “FedEx can low-ball” its competitors, said McMahon, who now drives for DHL.
But FedEx doesn’t low-ball its competitors, said Satish Jindel, a shipping consultant in the Pittsburgh suburb of Sewickley. On average, he said, FedEx customers pay slightly more per package ($6.70 compared with $6.29 for UPS) and its profit margins are narrower.
FedEx has grown, he said, because customers want more than one choice. “FedEx has also benefited from labor unrest at UPS,” Jindel said. When the Teamsters went on strike against UPS in 1997, “they helped FedEx gain business.”
The Barrington drivers were spurred into action by the California case. They strategized over coffee at New Jersey diners, and on June 30 they voted in a union election supervised by the National Labor Relations Board in Philadelphia. The vote was made possible by a ruling on June 1 by the NLRB’s regional director, Dorothy L. Moore-Duncan, that the drivers were employees and entitled to hold an election.
Six additional ballots are being contested in the unionization vote, but the drivers behind the effort say they have the votes to win. “It was a group effort,” Tofaute said.
The group isn’t affiliated with a big-name union, such as the Teamsters, which was unable to organize a FedEx depot in north New Jersey last year. The Barrington group calls itself the FXG-HD Drivers Association, which stands for FedEx Ground and Home Delivery.
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“FedEx wasn’t used to fighting a labor organization that wasn’t a union,” said Anthony Marchetti Jr., of the Delran, N.J., law firm Cureton Caplan and a former Teamsters organizer who represents the drivers.
Also on the case is firm partner Jerald R. Cureton, a former union-busting lawyer. They will be among the lawyers in the national independent contractor case against FedEx – a consolidation of 31 federal cases filed around the country that will be administered in South Bend, Ind.
Cureton told the drivers what they could expect from FedEx. “I knew because I used to do it,” he said. Cureton has filed unfair-labor-practice charges in Philadelphia against FedEx for terminating the contracts of union supporters including McMahon and Frank Cucinotti of Hammonton, N.J.
“Nothing could be further from the truth about these allegations,” said Colosimo, who would not address specific cases. “Trial lawyers and union organizers have shown us that they will say anything and represent anybody for their financial gain. Clearly this situation is no different.”
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Tofaute said he had been warned about the potential effects of an organizing effort. “Jerry told us there would be casualties and there were – more than we expected.”
He said FedEx brought in managers who helped some workers load their trucks and took them out for happy hours at local bars. Union supporters were segregated into one part of the depot, which became known as “Death Row,” Tofaute said.
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Tofaute, McMahon and Cucinotti said they were attracted to FedEx by advertisements that said, “Be Your Own Boss” and “Control Your Destiny.”
They bought trucks from the FedEx-mandated dealer, figuring they’d be able to work on their own schedules. If they needed to, they could expand, hiring additional drivers and buying more trucks.
“They try to paint a picture of partnership, but you are actually an employee – an employee paying all the bills,” Cucinotti said. He said he could hire only drivers or helpers approved by FedEx, and that these drivers would sometimes be fired – not by him, but by FedEx.
More and more stops would be added to their routes, and if they said they couldn’t handle them, they faced threats that they had breached their contracts, the drivers said.
When McMahon’s contract was terminated, he said, he wasn’t allowed to get his two trucks out of the depot. Eventually FedEx paid to tow them to his house. He said he had paid about $24,000 for the trucks, but could sell them at auction for only $2,600 because FedEx refused to allow him to sell them to another contractor.
“They know you have a truck to pay for and you have a family, so you’re stuck,” Cucinotti said.
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Cucinotti, a retired Camden County, N.J., worker, said he hasn’t found another job since FedEx terminated his contract in February. He said he lost $5,000 in selling his truck.
McMahon now works for DHL and belongs to the Teamsters. He said he drives a company truck about 50 hours a week and averages $900, plus health benefits and a pension.
As a FedEx driver, he drove his own truck and netted $1,000 a week – slightly more, but it did not include health insurance or a pension contribution.
FedEx’s Web site includes a profile of driver from Scranton, Pa., a former car salesman who switched to being a FedEx driver in 2004. “It was a little rough in the beginning until I learned my way around the neighborhood,” the profile quotes Glenn Werwinski as saying. “But it’s turned out to be something I love to do.”
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