What are the terms of the new FedEx proposed contract?

On June 12, the Air Line Pilots Association distributed a press release stating that the governing body had reached a tentative agreement on updated contracts, pending pilot ratification. The terms included a “30 percent pay increase, a 30 percent increase to the pilots’ legacy pension, and a fully developed and equally valuable company-funded Market Based Cash Balance Pension to provide a durable replacement for their legacy pension.” The release continues, saying the agreement marks the “largest investment in a pilot contract, on a per capita basis, and substantially raises the bar on pilot retirement.”

Although ALPA President, Capt. Jason Ambrosi said that “if ratified, will raise the bar on retirement for all pilots. This tentative agreement has the highest value achieved among major carriers in the last twenty years,” 5,000 pilots voted, with only 43% accepting these new terms.

The labor law that prohibits FedEx pilots from going on strike

Despite 57% of FedEx airline pilots voting “no” on the union-endorsed proposed contract, a strike isn’t likely anytime soon. That’s because FedEx pilots, unlike UPS drivers, are covered by the Railway Labor Act (RLA). This is the same act that would have allowed Congress to step in to avoid a rail strike last Christmas.

Covering rail workers and airline employees, the RLA places some major hurdles in the way of any unions wanting to strike. Enacted in 1926, the federal law holds negotiations and mediation above strikes for conflict resolution.

To protect interstate transit, the RLA, administered by the National Mediation Board, imposes time-intensive dispute resolution procedures and cooling-off periods before a strike is authorized.

What happens next?

A FedEx statement guarantees, “The tentative agreement voting results have no impact on our service as we continue delivering for our customers around the world. The parties will return to negotiations under the supervision of the National Mediation Board.”

Even if the two sides can’t reach an agreement, the president of the United States can step in and require a months-long cooling-off period, and Congress can take action to block the strike.

Long story short, it will be business as usual at FedEx for the foreseeable future.

Strike or no strike— how can you save money with FedEx?

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Get in touch with the team at ShipRx to book a free savings analysis and start seeing refunds on your next invoice.

Mike Partner