UPS, Teamsters Reach Agreement on New Contract
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UPS Inc. and the International Brotherhood of Teamsters on July 25 reached a tentative five-year collective bargaining agreement that covers more than 340,000 workers, the company and the union announced in separate statements.
The deal, which must now be ratified by the rank-and-file membership, staved off the possibility of a nationwide strike by the union workers. A work stoppage by the UPS workers threatened to wreak havoc on the economy. The union had voted to strike if a new contract wasn’t in place by the July 31 end date of the most recent agreement.
“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,” UPS CEO Carol Tomé said. “This agreement continues to reward UPS’ 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.”
UPS and the International Brotherhood of Teamsters, the union representing about 330,000 UPS employees in the U.S., have reached a tentative collective bargaining agreement.— UPS (@UPS) July 25, 2023
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Per the union, the new contract includes a pay raise for existing full- and part-time workers of $2.75 per hour in 2023 and $7.50 more per hour over the length of the contract. Existing part-timers will see pay increased to no less than $21 per hour immediately. Current part-time workers will receive longevity wage increases of up to $1.50 per hour on top of new hourly rates, while new part-time hires would start at $21 per hour and eventually advance to $23 per hour. Other senior-level part-timers earning more under a market rate adjustment will receive general wage increases, the union said.
Pay increases for full-timers will keep UPS drivers in the union as the nation’s highest-paid delivery drivers, the Teamsters said, with an average top rate of $49 per hour.
Also, all UPS Teamster drivers classified as 22.4s, who are those that drive on a Tuesday through Sunday schedule, would be reclassified immediately to Regular Package Car Drivers and placed into seniority, ending the two-tier wage system that the company enacted after it went to seven-day-a-week scheduled delivery service.
The deal also includes the creation of 7,500 new full-time union jobs and fulfillment of 22,500 open positions, establishing opportunities over the length of the contract for part-timers to transition to full-time work.
The agreement came just hours after the company and union resumed face-to-face negotiations in Washington. The Teamsters National Negotiating Committee unanimously endorsed the tentative agreement.
“We demanded the best contract in the history of UPS, and we got it,” Teamsters President Sean O’Brien said. “UPS has put $30 billion in new money on the table as a direct result of these negotiations.” He added, “This contract sets a new standard in the labor movement and raises the bar for all workers.”
Earlier negotiations included a commitment from UPS to install in-cab air conditioning in all larger delivery vehicles, sprinter vans and package cars purchased after Jan. 1, 2024. Plus, all UPS workers represented by the Teamsters will receive Martin Luther King Jr. Day as a full holiday.
Michigan State University business professor Jason Miller told Transport Topics that this agreement is a significant win for the company, the union and the country, since a strike threatened to derail the supply chain.
“Everyone wins in this contract,” Miller said. “You’re seeing increases in starting pay for part-time workers. That’s pretty nice. You have better escalator clauses over the length of the contract. This is a very solid deal for the Teamsters, and for UPS, they do not have a strike. That is the biggest thing for them — there is no strike.”
Industry groups and customers that rely on UPS to move an estimated 25 million packages a day, totaling 6% of the nation’s gross domestic product, said they were pleased with the deal.
“UPS is a major partner of the retail industry, and we are grateful it came to an agreement with the Teamsters without disruption to the marketplace,” National Retail Federation President Matthew Shay said in a statement. “The timing of this agreement is critical for consumers and families during the peak back-to-school shopping season. Retailers rely on stability within their supply chains, and this agreement will bring long-term stability as well as assurance to the millions of businesses and employees who rely on smooth and efficient last-mile delivery.”
The Teamsters now have several weeks to vote on the offer electronically. Member voting begins Aug. 3 and concludes Aug. 22.
UPS Inc. ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire companies in North America.
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