Sandy Springs-based UPS and the International Brotherhood of Teamsters have reached a deal on a new labor contract to avert a massive strike.
The two sides announced the tentative agreement for a new five-year contract Tuesday, just a week before the union’s strike deadline. The Teamsters union said the new contract deal comes with higher wages, more full-time jobs and protections for workers.
“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits,” Teamsters General President Sean O’Brien said in a written statement.
Pay for the tens of thousands of part-time UPS workers who handle packages inside warehouses was a sticking point in the talks. The deal reached Tuesday would give current part-time workers raises to at least $21 per hour immediately, according to the Teamsters. The deal is not yet final, and the union’s members are expected to vote on it next month.
UPS CEO Carol Tomé issued a statement saying “Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers.”
“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” Tomé said.
‘We kept firm’
The Teamsters’ current labor contract extends through July 31, and the union had threatened to strike Aug. 1 if it did not have a new contract agreement by that time.
Teamsters General Secretary-Treasurer Fred Zuckerman said in a written statement that UPS “came dangerously close” to a strike, “but we kept firm on our demands.”
The Teamsters have more than 340,000 members at UPS, making it the largest private collective bargaining agreement in North America.
The union’s members voted last month to authorize a strike if negotiations failed to reach an agreement. Union leaders then ratcheted up pressure in the negotiations, pushing for faster progress in the talks.
A strike would have crippled shipping across the country, affecting millions of deliveries a day and damaging UPS’ reputation with customers.
For Clay and Valerie Oliver, owners of Oliver Farm Artisan Oils, UPS is more than a shipping company: it’s a trusted relationship. Their location in the South Georgia town of Pitts means that their shipping options are limited, and they rely on UPS and the U.S. Postal Service.
They recently shared a note in their email newsletter, encouraging customers to order ahead to avoid shipping delays. Valerie Oliver said they were “praying” a deal would be struck before the contract’s expiration.”
Last week amid fears of a strike, Georgia Crafted owner Erin Zwigart said that planning for alternate shipping methods was a “big headache.” Zwigart depends on UPS for the delivery of 97% of her sales. However, she said local business owners she’d spoken with seemed to be “holding out” in anticipation that a deal would be struck.
Ratification
The next step is for the union’s 176 local leaders to meet July 31 to review the tentative agreement. If they recommend it for a ratification vote, UPS rank-and-file members will vote electronically on the deal Aug. 3-22.
O’Brien, the Teamsters leader, has worked to maintain broad support among members on the UPS negotiations, after years past in which the Teamsters had divided into factions.
The current Teamsters labor contract failed to get a majority vote five years ago. Yet the union still deemed the deal ratified because of a provision in its governing principles. That angered O’Brien, who criticized that contract and eventually ran for General President of the Teamsters and pledged to win big gains in the next round of contract talks with UPS.
O’Brien told his members during a briefing earlier this month that once a tentative agreement was reached and recommended by union local leaders, “We will work until the contract is ratified.”
“In the event it doesn’t get ratified, then we will put UPS, or UPS will put themselves on strike,” he said.
Some union members had sought higher pay raises for part-time workers, to $25 an hour starting wages, while Teamsters leadership had publicly committed to pushing for a starting rate of at least $20 an hour.
The contract ratification vote will indicate the breadth of support for O’Brien, the Teamsters and the new deal. O’Brien has pushed for unity among his members. “We are all in this together one way or the other,” he said earlier this month.
UPS has been losing some business to competitors, including FedEx, as customers worried about how they would move their goods if there is a strike.
Tomé also said in April that the company had a pipeline of potential business worth more than $6 billion, but that it was “hard to sell into... because of that Teamsters negotiation.”
“But we are going to go hard at it once we have that handshake deal,” Tomé said. “We’ve got to win faster, and we will win faster when the uncertainty is behind us” of the Teamsters negotiations.
UPS-Teamsters tentative agreement
The International Brotherhood of Teamsters released details on terms in the tentative agreement for a new labor contract at UPS:
- Current part-time workers would get raises to at least $21 per hour immediately. New part-time hires would start at $21 per hour and advance to $23 per hour.
- Full-time delivery drivers would get wage increases to an average top rate of $49 per hour.
- Existing full-time and part-time workers would get raises of $2.75 per hour this year, and $7.50 more per hour over the length of the contract.
- UPS’ use of seasonal workers would be limited to only five weeks from November to December, and would give priority to part-time workers to deliver packages using their own vehicles with schedules of at least eight hours.
- Creation of 7,500 full-time Teamster jobs at UPS, in addition to filling 22,500 open positions to allow more chances for part-timers to get full-time jobs.
- The contract would also include previously announced tentative agreements reached during negotiations that started in April, including equipping new trucks with air conditioning, ending a two-tier pay system by reclassifying workers in a lower-wage tier as regular package car drivers, stopping required overtime on a day they aren’t scheduled to work and establishing Martin Luther King Jr. Day as a full holiday.
Next steps
The union’s 176 local leaders are expected to meet July 31 to review the tentative agreement. If they recommend it for a ratification vote, UPS rank-and-file members will vote electronically on the deal Aug. 3-22.
