Business Desk

February 3, 2006

LABOR

FEDERAL OFFICE HANDS TEAMSTERS WIN OVER FEDEX A federal labor relations office ruled that delivery workers for FedEx Ground, a division of Federal Express, are employees of the company and not independent contractors as the firm asserted.

The January 24 decision, from the National Labor Relations Board's regional office in Boston found that FedEx Ground exerts control over the drivers, who wear FedEx uniforms and drive trucks emblazoned with large FedEx logos.

"There is little room for the contractors to influence their income through their own efforts or ingenuity, as the terminal manager determines, for the most part, how many deliveries they will make each day," the board official, Rosemary Pye, wrote. The decision allows 23 drivers at a Northboro, Mass., facility to vote on affiliating with a Teamsters local in Worcester, Mass.

"This decision sends a clear message to FedEx Ground - stop misclassifying your workers to fatten your bottom line," the Teamsters' president, James Hoffa, said.

A spokesman for FedEx, Perry Colosimo, said the company will appeal. "What many refer to as control by FedEx Ground is actually driven by marketplace demand for high levels of service," Mr. Colosimo said.

The independent contractor arrangement helps keep FedEx Ground's costs below that of Teamsters-organized United Parcel Service, but has led to dozens of lawsuits from drivers who contend FedEx is violating labor laws.

- Staff Reporter of the Sun

IN THE COURTS

FORMER EXECUTIVE TESTIFIES THAT LAY, SKILLING HID LOSSES HOUSTON - Enron's top two executives in 2001 concealed huge losses in the company's fledgling energy business and misrepresented the source of revenues in another unit to protect its stock price, a former Enron executive vice president testified in U.S. District court yesterday. Mark Koenig, who was head of Enron's investor relations group until May 2002, testified for a second day here in the criminal conspiracy and fraud trial of Kenneth Lay and Jeffrey Skilling, Enron's former chairman and chief executive officer, respectively.

- Dow Jones Newswires

REAL ESTATE

MORTGAGE RATES ACROSS AMERICA RISE Mortgage rates around the country went up this week, with rates on 30-year mortgages climbing to their highest point since late December. Mortgage company Freddie Mac, in its weekly nationwide survey released yesterday, reported that rates on 30-year, fixed-rate mortgages rose to 6.23% for the week ending February 2.That was up from 6.12% last week and was the highest rate since the week ending December 22.

- Associated Press

NEWSPAPERS

NEWSPAPER GROUP WANTS SEARCH ENGINES TO PAY An international association of newspaper publishers has started looking at ways to collect payments from search engines and news aggregators that publish composite news sites.The World Association of Newspapers, a Paris-based group of 18,000 newspapers in 102 countries, says it has formed a task force to examine options for challenging the "exploitation of content" by companies such as Google and Yahoo.

- Dow Jones Newswires

WALL STREET

NEW CRITICISM OF NYSE-ARCHIPELAGO DEAL EMERGES As the New York Stock Exchange nears the final corner toward its planned acquisition of Archipelago Holdings, the exchange faced renewed criticism of the deal from a group that represents floor brokers at the Big Board.The exchange came under fire from the Independent Broker Action Committee, an alliance of NYSE floor brokers and member firms. In a statement yesterday, the IBAC said it was submitting a second comment letter to object to "potential regulatory conflicts" that could arise from the merger.

- Dow Jones Newswires

PRIVATE EQUITY

WASHINGTON STATE PLEDGES $1.5B FOR NEW KKR FUND Kohlberg Kravis Roberts & Co. won a preliminary $1.5 billion pledge from the Washington State Investment Board,half the amount the buyout firm asked for as it seeks more than $10 billion its largest fund ever.

- Bloomberg News