Holy cow! I was out of breath reading this. Ever hear of a paragraph?And policy states that hiring mgr must contact employee's mgr to inform him he has received a signed offer letter. If transaction wasn't completed, according to hiring mgr it was up to my mgr whether he allowed me to apply for other jobs, not set in stone like you say. Said mgr was asked to ask HR whether I could withdraw from job and said he was told I could up to reporting day. Said there may be a penalty involved. Didn't know what penalty was although just discussed with HR and knew about penalty. Was HR not clear about process? Mgr could let me apply, knew why I was applying, chose to stand behind policy and say no dice. Fine by you, mgr was correct and you know for a fact that he has always been correct. There, I said it for you. No, nothing funny going on here. You quoted FedEx2000 but even he said mgr not knowing what penalty was was crap. And you don't think I should even ask for an exception to be made even though process was never completed according to policy. And that I should be aware of any applicable policies when applying but make allowances for mgr "not knowing" even though as a hiring mgr he should know applicable policies. Not necessarily you say but a courier should, even though mgrs deal with hiring all the time but couriers don't transfer often if at all. Doesn't matter, if surprise to courier too bad. We must follow policy. And as I've pointed out from my own experience many mgrs don't follow policy but do anything they can get away with and company sweeps under carpet. And if you dare say geez, I've worked extremely hard for you for 20+ years, for once can you make an exception? Nope, and we'll ridicule your service with snide remarks. How dare you think you should get anything for doing right by us, even while getting screwed. We have the power, and if you keep whining we'll set our old courier attack dog, Astro, er, Quadro on you. Yeah, I know, he's really a mgr wannabe, that's why we like him so much. You can learn a thing or two from that fellow. Bleeds purple and orange, and that's rare these days. FedEx Cares!

Two wrongs are never going to make a right. Just because the hiring manager had not yet informed your manager that he had a signed offer letter doesn't mean A. he wouldn't, and B. that you're off the hook. HR was right, you can withdraw up to reporting day, it's just that there's a penalty that goes along with that.
I have no idea if your manager has always been correct or not. This whole thing is irrelevant. You have already stated that you weren't going to accept the job so it doesn't matter whether your manager knew the penalty or wears pink underwear, both things are irrelevant to the consequences of you withdrawing after signing the offer letter.
You can ask for an exception all you want. Your situation is not different from hundreds of employees that want to live near family. The process was completed, you signed the offer letter. Once again, just because the hiring manager hadn't yet notified your manager is irrelevant. And as for making allowances for the manager not knowing policy, I don't expect him, you, or anyone else to know all the policies. All you had to do before signing your offer letter if you had any doubt in your mind that you might not accept the position is to ASK what happens if you sign and then withdraw. You don't know the policy and neither does your manager so either one of you or both of you then go and look it up. If your manager won't help you, then HR will.
Again, I'm not attacking you, I'm attacking your argument. I'm sure you are a great guy even though you are a stubborn b**tard.

Just because you've worked hard for 20 years, a court is not going to accept that as a reason why a manager/FedEx treated you better/differently than someone else, especially if they are in a protected class. If you don't like that then start the political process to change the law.
If you accept the fact that you had complete control over this situation and it isn't anyone's fault that you didn't think to ask in advance, it'll do wonders for your blood pressure.