Teamsters Go to FedEx Shareholders

The Teamsters are making a concerted effort to unionize FedEx Ground.  In this instance, as reported by Logistics Management Magazine, they are going to shareholders trying to persuade them that the FedEx Ground business model of independent contractors is a "flawed model" with tax and benefits liabilities that FedEx may be liable for in the future.   As Jerry Hempstead points out below,  the shareholders are going to do what's good for the shareholder.   Right now FedEx shares are doing pretty well.  

Parcel shipping: Teamsters renew call for FedEx Ground employees to unionize Jeff Berman, Group News Editor -- Logistics Management, 9/2/2009 WASHINGTON—In its latest attempt to get FedEx Ground employees to organize, the Teamsters Union said in a letter to FedEx shareholders that its business model for FedEx Ground is highly flawed, as well as “an unlawful and unsustainable business model.” FedEx classifies its Ground drivers as independent contractors rather than full-time employees. And the Teamsters charge that this “misclassification” has allowed FedEx to “evade expenses like payroll taxes, overtime pay, and benefits,” adding that “numerous state and government agencies have found that FedEx Ground’s contractor model is a sham and are looking to collect the money owed to workers and states.” The Teamsters also cited an August 2008 Bloomberg article that stated the pre-tax liability from unpaid payroll taxes could be as high as $2.5 billion.   While the Teamsters stated their case to FedEx shareholders, an industry analyst told LM they are likely to have a “hard sell” ahead of them for a few different reasons. “The shareholders in my humble opinion are going to do what's best for the shareholder and not what's best for a bargaining unit that does not represent any FedEx employees,” said Jerry Hempstead, president of Orlando-based Hempstead Consulting. “The shareholders have seen the price of the stock double in the last six months [from $35.76 on March 6 to $69.60 on September 2]. That's usually a sign that Wall Street is positive on the direction management is taking the company and a vote of confidence in those steering the ship.”

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