Teamsters union members furious with a decision by union leaders to ratify a five-year contract covering UPS Inc.’s (NYSE:UPS) small-package workers, despite the contract proposal being rejected by the majority of voters, have vowed to force lead negotiators back to the bargaining table with the transport and logistics giant.
At UPS Freight, the company’s LTL unit, matters could quickly come to a head. After decisively rejecting the tentative contract proposal agreed to by union leadership and the company, workers at UPS Freight on Oct. 11 said they would cancel a 30-day contract extension when it expires on Nov. 12. Unless an agreement is reached by then, 12,000 unionized UPS Freight workers could walk off their jobs.
About 62 percent of UPS Freight employees voted down their 5-year contract proposal, citing dissatisfaction with driver sub-contracting language and substandard wage increases.
Denis Taylor, the Teamsters’ lead UPS negotiator, has said he will work with UPS to modify provisions that led 54% of the union’s UPS small-package members to reject the proposal when it was voted on earlier this month. However, Taylor said he is required under the Teamster constitution to ratify the contract, citing language which calls for ratification if less than half the eligible voters cast ballots, unless two-thirds of those who do vote reject the proposal. About 44% of 209,000 eligible UPS small-package employees voted, and the rejection threshold fell far short of the two-thirds margin.
By contrast, about two-thirds of eligible UPS Freight voters cast ballots, meaning there was adequate voter participation that the overwhelming “no” vote prevailed. UPS Freight and Teamster negotiators are expected to meet starting in the next day or two to work on a revised proposal.
UPS and UPS Freight contracts, which include the master contract as well as separate agreements governing Locals 705 and 710 in Illinois, Indiana, and Iowa, cover a combined 268,000 employees, making it the largest collective bargaining agreement in North America.
Taylor had telegraphed his intent to invoke the so-called two-thirds provision before the outcome was made public, a sign that leadership knew the pact could be headed for trouble at the ballot. The centerpiece of rank-and-file concern is language establishing a two-tier wage structure for drivers with those with less seniority being paid, on average, $6 an hour less than their senior counterparts. Drivers in the new tier would be asked to perform other tasks and would work different schedules that include weekend shifts. The latter provision is a nod to the reality that, in the world of e-commerce, package deliveries have become a 7-day-a-week business. UPS has never operated on Sunday.
Opponents of the provision were more upset about the lower wage scales for the “hybrid” drivers than about the staggered schedules.
The rank-and-file vitriol was most strident in Louisville, home of UPS’ WorldPort global air hub and the domicile of Teamster Local 89, a tough local at sharp odds with Teamster leadership in Washington. Fred Zuckerman, who heads the local and who was narrowly defeated by James P. Hoffa for the Teamster presidency in 2016, called Taylor’s decision a “vile, reprehensible, and abhorrent act that will damage the foundation of our union for decades to come.”
Zuckerman disputed Taylor’s contention that the contract cannot be modified and put out for a second vote, saying provisions of the Teamster constitution permit such action if it is deemed in the best interests of the union. Zuckerman said there was little chance that Taylor would succeed in extracting more concessions from UPS, claiming he has little leverage with the company as long as he maintains his stance on ratification.
The local leader has called on Hoffa to convene an emergency meeting of the Teamster General Executive Board and order Taylor to reject the small-package contract and all local and regional supplements and riders, and to demand a second cycle of negotiations with UPS. Teamster officials did not respond to a request for comment.
A UPS national contract cannot take effect until all local or regional supplements and riders are ratified. Teamster members rejected 10 such side supplements, according to the Teamsters for a Democratic Union, a Teamster dissident group.
In a statement, UPS spokesman Glenn Zaccara said the company acknowledged the Teamster ratification and looks forward to reaching agreement on the remaining supplements and riders. Zaccara affirmed UPS’ prior comments that the contract rewards Teamster workers while enhancing the company’s competitive position.
(Correction: this story has been edited to reflect that the waiting period for the UPS Freight contract is 30 days, not 60 days.)