FedEx, pilots request federal mediation to resolve contract dispute

FedEx Express and the union representing its pilots on Wednesday filed for federal mediation with the National Mediation Board to help unglue contract negotiations that began in May 2021.

The joint filing by FedEx (NYSE: FDX) and the Air Line Pilots Association requests expedited mediation under the Railway Labor Act.

FedEx pilots are disgruntled by the pace of negotiations on a new labor deal to improve pay, retirement benefits and quality-of-life issues. Union members say they jeopardized their safety during COVID-19 to keep the airline moving critical goods, such as personal protective equipment and vaccines, and were instrumental in FedEx achieving superior profits the past two years.

UPS (NYSE: UPS) pilots in August reached agreement on a two-year contract extension.

ALPA’s goal was to reach a collective bargaining agreement by May of this year.

Last week, more than 100 off-duty FedEx pilots held an informational picket at the Financial District in New York City to demonstrate their increasing frustrations.

“The decision to invoke the services of the NMB was not taken lightly,” said Capt. Chris Norman, chair of the FedEx ALPA Master Executive Council. “Although we are disappointed with management’s proposals, we remain prepared to work with FedEx under the auspices of federal mediation to achieve a contract that recognizes the collective contributions of FedEx pilots.”

ALPA said direct negotiations have been productive on the work rule sections of the contract. The parties have successfully closed eight of 12 sections, but significant differences remain over retirement and pay rates. 

“With peak shipping season around the corner, it’s imperative that management fully commits to reaching a new pilot contract,” Norman said. “FedEx pilots are getting more frustrated every day that goes by without an agreement. We’re hopeful that a mediator will assist in moving negotiations along and help us reach an agreement that recognizes our collective contributions to FedEx’s success.”

The Railway Labor Act is designed to prevent work interruptions in critical interstate commerce and applies to airlines. It precludes workers from striking and companies from conducting lockouts until they go through a lengthy series of bargaining steps, including federal mediation. 

FedEx’s financial situation has recently turned for the worse, which could influence how generous management is willing to be on compensation as it copes with rising costs and falling demand. The company said last month it is experiencing a dramatic dropoff in international traffic that resulted in a $500 million plunge in operating income for the Express unit during the fiscal first quarter. Executives said they will cut 11% of FedEx Express’ trans-Pacific flights, 9% of its trans-Atlantic flights and 17% of its flights between Asia and Europe and park eight narrowbody jets.

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