About 20 members of the labor committee and Teamsters union picketed and handed out fliers on Thursday of last week outside Fritz headquarters at Third and Mission streets. After a 30-minute rally, they delivered a letter restating their position to company president Lynn Fritz.

"We're here to send a message to Fritz," said Richard Holober, a member of the Jewish Labor Committee's regional administration committee and assistant research director for the California Labor Federation, AFL-CIO. "Fritz better have their eyes open."

This month, the Fritz company plans to buy out the Dallas-based air-freight handler Intertrans Corp., which owns the Miami-based Stair Cargo Services Inc. According to the U.S. Commerce Department, an administrative law judge upheld two charges last month that Stair Cargo violated the U.S. ban on participating in or assisting the long-time Arab commercial boycott of Israel and countries doing business with Israel. Stair Cargo was fined $10,000.

The charges stemmed from a 1988 incident in which Stair Cargo employees answered a Kuwait company's request for an American company's full name in order to check it against a blacklist of firms doing business with Israel, according to the Commerce Department. Stair Cargo was charged with aiding the boycott and with failing to report the request to the Commerce Department.

But Stair Cargo is appealing the judge's decision, the firm's attorney, Michael Deal, said in a telephone interview from Kansas City, Mo.

The company isn't contesting the fact that employees faxed the information to Kuwait, Deal said. Instead, it is arguing the Commerce Department's stance that this act actually violated the regulations.

Lynn Fritz wasn't available for comment. But Stephen Enna, the Fritz company's director of corporate services, considered last week's protest embarrassing and unnecessary.

"We suddenly have found ourselves in the middle of this," he said. "We are three or four layers removed and we don't even own [Stair Cargo]."

The union organizers' letter demands that the Fritz company:

*Orders Stair Cargo to stop the appeal process and settle with the government.

*Informs customers that it will not do business with companies violating the anti-boycott regulations.

*Agrees to an independent audit to determine that it is meeting the anti-boycott regulations.

*Directs Stair Cargo to negotiate a wage system that isn't based on the English skills of Spanish-speaking workers. This demand is unrelated to the boycott.

Although Enna could not specify how the Fritz company will handle the demands, he said Fritz's current policies regarding the boycott and labor practices will apply to Stair Cargo.

"We have offices all over the world, including in Israel," he said. "We are proud of our Israeli connections."

The U.S. anti-boycott law took effect in 1978. It prevents American companies from taking part in the Arab League's 47-year-old boycott against Israel, companies that do business with Israel and companies engaging in trade with those firms. Since the 1993 Oslo peace accords, however, many Arab countries have relaxed their secondary and tertiary boycotting.