Teamsters plan broad organizing push into global supply chain

Farmer heads union effort to capture logistics workers beyond traditional niche.

By Mark B. Solomon

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The Teamsters union, looking to rebuild its membership rolls, has expanded its organizing efforts to reach workers at logistics companies outside the union's traditional niches of trucking, parcel, and airlines.

Jeff Farmer, the union's director of organizing, is spearheading the initiative. Farmer, 63, joined the Teamsters in 2002 to build an international department to support the union's traditional grass-roots work. In an interview last month, Farmer said the Teamsters' strategy will be "focused primarily on transportation and the global supply chain." Farmer said that the Teamsters organization plans to leverage its expertise and resources across transport segments to hit companies from the supply chain's first mile to the last.

The Teamsters have long asserted that the supply chain is a logical extension of its organizing domain, according to Kate Bronfenbrenner, director of labor education research at Cornell University's School of Industrial and Labor Relations. The union has "been thinking in a supply chain model for some time," she said yesterday in an interview.

The effort is also designed to beef up the union's membership levels, which have shrunk from about 2.1 million at their peak in 1976 to about 1.4 million today. A large part of the erosion has come from the once-mighty freight division, which prior to motor carrier deregulation in 1980 boasted a membership of about 400,000, but is now at between 30,000 and 75,000, depending on the source of the estimates. The division has been battered for more than 35 years by trucking bankruptcies, consolidations, and the rise of regional non-union carriers.

Thousands of U.S. supply chain workers are unaffiliated with a labor union, and all are free to join one. However, many port drivers and warehouse workers function as independent contractors, and a unit of contractors would not be entitled to the same privileges and protections accorded a regular union bargaining unit under the National Labor Relations Act (NLRA), the 1935 statue that governs labor relations in all industries except railroads and airlines.

For example, an employer is not under the same obligation to collectively bargain with a union over contract terms for an independent contractor that it would be to bargain over issues affecting its regular employees. Also, an independent contractor who goes on strike would not be protected from employer reprisals under the NLRA. In addition, contractors that organize could technically be in violation of federal anti-trust laws because they are legally small businesses.

Farmer acknowledged the difficulties his organizing team faces in overcoming the legal challenges, as well as capturing a worker universe that is as geographically dispersed and market fragmented as supply chain workers. For those reasons, he said, the Teamsters are especially focused on supporting workers who claim they've been misclassified as contractors even though they operate in a de facto manner as employees. Workers allege that companies illegally engage in worker misclassification to avoid paying market wages and benefits, and to push all of the operating costs onto the workers.

Beyond what the Teamsters say is an issue of basic worker fairness, those workers who enter the fold as company employees would gain the protections under labor law that were denied to them as contractors.

In recent years, the courts and the National Labor Relations Board have adopted a labor-friendly interpretation of what constitutes a company employee. In one case, a unit of Memphis-based giant FedEx Corp. agreed to a $228 million settlement with a group of California drivers after the unit was dealt several legal setbacks and considered any further appeals to be counterproductive. The Teamsters are currently fighting XPO Logistics Inc., the Greenwich, Conn.-based transport and logistics behemoth, over allegations that port drivers at XPO Cartage Inc., which had been part of intermodal provider Pacer International before XPO acquired Pacer in 2014, were misclassified as contractors.

The battle over misclassifications is just one front of what is expected to be an all-out organizing war with XPO. The company, under the leadership of Bradley S. Jacobs, its founder, chairman, and CEO, has acquired 17 companies over the past five years, dramatically expanding its footprint to touch virtually all aspects of logistics. Besides being a natural organization target because of its exposure to so many facets of the business, XPO's 2015 acquisition of unionized French trucking and logistics giant Norbert Dentressangle S.A. opens up a "vast arena" of opportunity to collaborate with the 15 labor councils representing ex-Dentressangle workers who are now part of XPO in nine European countries, Farmer said.

In Jacobs, Farmer and the Teamsters are facing an implacable foe. Jacobs told an industry conference earlier this week in Long Beach that he doesn't "believe in the Teamsters," adding that he sees no value in what the union could bring to XPO or its workers. At XPO, "99.5 percent (of the company) is union-free, and will likely remain union-free," he said.

Jacobs' wrath that day appeared to center on the protests by about 100 people outside the convention center where he made the keynote presentation. Jacobs contrasted the Teamsters' raucousness with the "cordial relationship" he said that XPO enjoys with its workers councils in Europe, which he said behave in a respectful manner toward management.

XPO and the Teamsters are likely to see more of each other. XPO's less-than-truckload (LTL) workers, virtually all of whom were former employees of Con-Way Freight, the LTL unit of parent Con-Way Inc. that XPO bought in September 2015, have voted to accept Teamster representation at terminals in Miami; North Haven, Conn.; and Philadelphia. XPO has accepted the election results in those cities, but there are no contracts in place at any of them. The Teamsters also won elections at facilities in Los Angeles; Laredo, Texas; and Aurora, Ill. a Chicago suburb; however, XPO has filed objections, and the results have yet to be certified. The company prevailed in petitions filed for representation in Birmingham, Ala., and West Chester, Pa., about 30 miles west of Philadelphia.

The Teamsters' plans to broaden its industry and geographical reach come at a potentially pivotal time for U.S. and global logistics networks. Nationalist movements in the U.S. and Europe threaten to reshape international trade patterns and disrupt supply chains around the world. The push for automation both on the road, in terms of autonomous vehicles, and in the warehouse and distribution center put workers' jobs in jeopardy. Through all this, the multi-national corporation, while in retreat, is still very much a force. And the model does not encourage union representation.

The Teamsters "are uniquely positioned in the global supply chain" to extend the union's organizing influence, Farmer said. He acknowledged, however, that the current climate represents "a time of real change and challenges."