The Teamsters union has said that proposed changes to a tentative contract from UPS Freight, UPS Inc.’s (NYSE:UPS) less-than-truckload unit, fails to address the grievances raised by the rank-and-file, and that the union’s negotiating committee will call a nationwide strike sometime after Nov. 12 if workers reject the company’s offer.
UPS Freight employees will vote Nov. 9-11 on the contract, less than a month after more than 60 percent of eligible voters decisively rejected the first proffer. The contract rejection triggered a 30-day extension period that expires Nov. 12. After that time, the union’s negotiating committee can—and now appears it will—call a strike if an agreement isn’t reached within the 30-day period.
The memo said a strike would be a “last resort,” but that the negotiating committee would have no choice should members reject the offer. The rank-and-file are taking a second vote on the initial contract, and are not voting on a revised proposal.
UPS Freight, based in Richmond, Va., has called this its best and final offer. Union negotiators have said the company has told them there are no more financial concessions to be made. The Teamsters dispute that contention, noting UPS Supply Chain and Freight unit’s strong third-quarter results, which were disclosed last week.
UPS issued a statement today saying the contract does right for unionized employees while preserving the unit’s competitive position. The Teamsters represent about 12,000 workers at the unit.
In the communique, Kris Taylor, co-chair of the UPS Freight negotiating committee, said the company has agreed that road and pick-up and delivery drivers would be paid their normal driver wages when performing non-driving duties such as dock work. On the thorny issue of sub-contracting, Taylor said the percentages of subcontracting would be reduced over the contract’s 5-year life. Under the proposal, UPS Freight can subcontract out more driver work should volumes rise by certain levels. The unit could subcontract above a specific number of guaranteed Teamster jobs. The Teamsters have said UPS Freight has been engaged in excessive driver subcontracting for years.
The Teamster dissident group Teamsters for a Democratic Union, which is typically at sharp odds with mainstream leadership, unsurprisingly spared little invective to describe the changes. It called the language presented to members a “turd” and “insulting.” The original wage increases, which TDU said are so small that they will not keep up inflation, have not been changed, the group said. UPS Freight also failed to offer any "real improvement” in mitigating the frequency of subcontracting, TDU said.
Because neither the company or Teamster leadership want a strike at UPS Freight, the threat of a walkout so close to the start of the peak holiday delivery season should give the members enough leverage to effect meaningful contract change, TDU said.
If UPS Freight customers are concerned about the escalating labor tensions and are making contingency plans, they appear not to be showing it. Most shippers are either unaware of the situation, or if they know about it they are paying it little heed, according to several sources. A high-ranking LTL carrier executive said the company has seen no additional spike in business from UPS Freight customers possibly interested in diverting their shipments.
One shipper executive said some brethren are concerned about the talks’ status, but believe that both sides will work things out by Nov. 12. The executive is not aware of any shift in business away from UPS Freight.
The much larger UPS-Teamster contract covering 256,00 UPS small-package workers has already been ratified despite 54 percent of eligible voters turning it down. About 42 percent of 209,000 eligible voters cast ballots.
Under the Teamster constitution, if less than 50 percent of eligible voters cast ballots, a contract must be ratified unless it is opposed by at least two-thirds of those who did vote. The so-called two-thirds provision didn’t apply to the UPS Freight contract because far more than half of eligible voters cast ballots.