FedEx Freight Must Recognize Drivers-Only Bargaining Unit

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By Kevin McGowan

Oct. 12 — FedEx Freight Inc. must recognize a Teamsters local as the bargaining representative of its drivers at a California facility, a federal appeals court decided ( FedEx Freight, Inc. v. NLRB , 2016 BL 339525, 7th Cir., No. 16-1360, 10/12/16 ).

The Seventh Circuit became the third federal appeals court to reject FedEx Freight’s invitation to strike down the National Labor Relations Board’s standard for determining appropriate bargaining units.

In each case, FedEx Freight unsuccessfully contended that its drivers and dockworkers must be combined in the same unit because they share the same employment interests and concerns.

The Third Circuit in August upheld a separate board order requiring the company to recognize a Teamsters-represented unit of drivers only in New Jersey. The Eighth Circuit has also ruled FedEx Freight must bargain with a drivers-only union.

The practical effect is a victory for unions, as it can be tougher to win representation elections among larger, more diverse groups of employees.

FedEx Freight, a FedEx Corp. subsidiary, argued the NLRB shouldn’t have certified a unit of 50 drivers for a representation election without including 27 dockworkers who also work at its Stockton, Calif., facility.

But it failed to show there’s such an “overwhelming community of interest” between the two groups of employees that they must be considered one unit, the Seventh Circuit said Oct. 12.

The company disagrees and is considering all its legal options, a FedEx Freight spokeswoman told Bloomberg BNA Oct. 12.

An attorney for the union wasn’t immediately available for comment.

Different ‘Community of Interest.’

The legal test for whether a union can represent a group of workers is whether the employee unit is “appropriate” for collective bargaining. That requires unit members to have “common employment concerns,” also called a “community of interest,” that differ from the company’s other employees, Judge Richard A. Posner wrote.

The NLRB decided the Stockton drivers had a community of interest because they do the same work, are paid the same and receive the same benefits.

But based on “compelling evidence” that the drivers’ pay, benefits and working conditions differ significantly from those of the dockworkers, the board rejected FedEx Freight’s argument that the dockworkers must be included in the unit.

The drivers elected Teamsters Local 439 as their bargaining representative. FedEx Freight sought to decertify the union, contending the NLRB erred in excluding the dockworkers.

Correct Criteria Used

The board used the correct criteria under the National Labor Relations Act, the court said.

Drivers work full time outside the terminal, while the part-time dockworkers load and unload freight within the terminal, the court said. The drivers are better paid and receive more benefits.

The evidence makes clear the dockworkers are “second-class citizens” of the Stockton workforce, the court said. That suggests “a potential for serious discord” among employees if the dockworkers and drivers were placed in the same unit, Posner wrote in the opinion, which was joined by Judges Kenneth F. Ripple and Ilana Diamond Rovner.

NLRB Standard Upheld

FedEx Freight argued the board’s standard, which requires a showing that the excluded employees “share an overwhelming community of interest” with the unit employees, puts “too heavy a burden of proof” on employers.

That standard didn’t originate with the NLRB’s 2011 Specialty Healthcare decision but instead can be found in board rulings going back 40 years, the court said. The NLRB also appears to treat “overwhelming” as a synonym for “inappropriate,” which might be a less demanding standard for employers to satisfy, Posner wrote.

It’s “evident” the “community of interest” between the drivers and the dockworkers is “slight” rather than “overwhelming,” the court said.

The NLRB properly separated the drivers and dockworkers, based on their differing working conditions, pay and benefits and the “undeniable danger of strife” if they were combined in the same unit, the court said.

FedEx Freight’s in-house legal department represented the company. NLRB attorneys represented the board. Beeson Tayer & Bodine represented Teamsters Local 439.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com

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