Reference no: EM131497807

Question: Federal Express and Labor Organization Historically, labor relationsfor the Federal Express Corporation had been governed by the Railway Labor Act (RLA), which required that unions attempting to organize the employees of a company must do so nationally. Federal Express had operated as an "express company" under the RLA. Organized labor, however, claimed that a bill enacted in 1995 subjected Federal Expressto labor organization under a different law, the National Labor Relations Act (NLRA), which allowed unions to organize workers locally. Avoiding unionization was a key element of Federal Express's market strategy. Of its 110,000 domestic employees, only its 3,000 pilots were unionized.37 Because local organization was usually easier for a union than national organization, Federal Express wanted Congress to pass new legislation that would clearly place its labor practices under the RLA. Federal Express's nonmarket objective was to have a Senate ally attach a relatively small amendment (a "rider") to a much larger bill (a "vehicle"). The legislative vehicle in this instance was the annual authorization bill for the Federal Aviation Administration, which was regarded as a "must-pass" measure. The substantive aim of the rider was to remove the jurisdictional ambiguity associated with the status quo by clearly making Federal Express's labor relations subject to the RLA.38 Although minor in comparison with the larger bill, the amendment would have attracted attention and opposition if offered outright on the Senate or House floors, so Federal Express deferred to the judgment of one of its Senate allies who successfully negotiated for insertion of the amendment in the conference committee.

When the bill and rider came back to the Senate for a vote on final passage, however, senators aligned with organized labor decided to mount a fight. They sought to block the vote on final passage of the conference report (and hence the bill) unless and until the rider were dropped. They began a filibuster. To stop the filibuster (i.e., to invoke cloture) and thereby move to certain passage of the bill and the rider, Federal Express and its supporters in the Senate had to build a majority of at least 60 votes. Suppose that supporters were willing to trade votes or other support of varying value to recruit the needed votes to stop the filibuster. Let the status quo q denote the current ambiguous labor jurisdiction, and let the conference committee bill b denote unambiguous RLA jurisdiction. Along with the filibuster pivot f (the 41st ideal point) in the Senate, these points are identified in Figure 7-9. Assume that each senator has a symmetric utility function, so that his or her preference for q or b is determined by the relative distances from his or her ideal point to q and b. For convenience, assume also that the shapes of senators' utility functions are symmetric and that their ideal points are uniformly distributed (equally spaced) over the line as shown. The median senator's ideal point is shown as m, and Federal Express's allies have ideal points on the right side of the spectrum. Finally, assume that if the support provided or votes traded are sufficiently valuable, a senator will vote for b. Remember, however, that Federal Express supporters do not want to trade more votes or provide more support than is necessary.

1. Which senators will not receive support or vote trades and why not?

2. Which senators will receive support or vote trades and why?

3. Which senator will receive the most valuable support or vote trades and why?

4. Does it make a difference if an opposing group (say, the AFL-CIO) were simultaneously working to offset the efforts of Federal Express and its legislative allies by implementing its own vote recruitment strategy?