Editorial: Government meddling isn’t healthy for business

When skeptics start beating up on President Barack Obama’s health care ideas because the so-called public option would put private enterprise at a disadvantage, he is quick to point out United Parcel Service’s success at wresting parcel-handling business from the U.S. Postal Service.

He needs a better analogy.

At least he should check in with the folks at UPS’ much smaller private-sector competitor, FedEx, which has been claiming loudly of late that UPS has turned to Congress and its federal authority to put FedEx at a disadvantage.

That is, UPS and the Teamsters union successfully lobbied the House of Representatives on behalf of a measure that would require FedEx’s labor relations to be governed under the National Labor Relations Act instead of the Railway Labor Act. That would overturn a decades-old federal policy while threatening the reliability on which FedEx has built a favorable reputation with its customers.

The Senate hasn’t followed suit, but the two bodies are expected to reconcile their differences before the end of this month. That’s the deadline for the Federal Aviation Administration’s reauthorization bill, which contains the provision in question.

The heart of the issue is this: Under the NLRA, labor organizing can take place locally, but under the Railway Labor Act, it has to be at the nationwide level. That’s because Congress wanted a safeguard against local strikes disrupting an entire national transportation network such as a railroad, or later an airline.

As a company, FedEx is broken up into various sectors, most of which fall under the NLRA already. But the overnight express parcel service falls under the Railway Labor Act, because it is considered an airline. It was established as an airline, and the 9th U.S. Circuit Court of Appeals has affirmed in a California case that it is an airline that uses trucks for local movement of cargo at the departure and termination points of its flights.

But if trouble flares up at just one of those points – Spokane, Seattle, Oakland, Calif., or anywhere else in the country – shipments can be stymied potentially anywhere, and the reliability that shippers demand disappears.

To suddenly face that risk would derail FedEx’s competitive stance, even though the rationale behind the Railway Labor Act is as valid today as it ever was.

UPS and FedEx are both vigorously competitive and innovative businesses and should be allowed to thrive or fail in a free-market environment. Congress shouldn’t be trying to choose the winners. That’s the consumers’ job.