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UPS vs. Teamsters isn’t the only standoff in contract negotiations; internal Teamsters divide exists also

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As negotiations with UPS and the Teamsters move toward the August expiration of the current five-year pact, there’s another dichotomy that has opened up as a sidebar to the talks.

Various media reports have stated that UPS is seeking to create a so-called “hybrid driver,” one that would get paid a lower rate than existing drivers and would work on Sundays.

The only entity that seems ready to talk at all about the existence of the hybrid proposal is a dissident Teamsters group called the Teamsters for A Democratic Union. In a blog posting late last week, the TDU said chief UPS negotiator Denis Taylor “threw off multiple members” of the committee negotiating with UPS. The reason, according to the TDU, is “for opposing givebacks.”

Taylor is embarrassed that his deal-cutting is being exposed to the membership,” the TDU said on its website late last week. “His latest giveback would create a two-tier system in package of lower-paid ‘Hybrid Drivers’ that deliver ground, work Sundays, and only get paid the ‘22.3 rate.’” In UPS labor parlance, a 22.3 rate is a full time worker as defined under a particular section of the prevailing contract between UPS and the Teamsters, section 22.3, and it is one that began as a part-time worker.

According to the TDU, three members were removed from the committee by Taylor: Avral Thompson, John Bolton and Matt Taibi. “All three strongly opposed the givebacks to create Hybrid Drivers,” the TDU website said.

“Taylor is embarrassed that his deal-cutting is being exposed to the membership,” the website said. “He refuses to stand up to the company or to tell members the truth about contract negotiations, so he is lashing out at his own negotiating committee instead.”

At the root of the issue is what is widely reported to be UPS’ efforts to create a class of drivers that would work Sunday as well as other days, in order to meet the ever-increasing demand from e-commerce to make deliveries seven days a week.

Ken Paff, an organizer with the TDU, told Freightwaves that the issue of any sort of two-tier pay is the core disagreement that the dissident organization has with the current state of negotiations. “We are strictly against a two-tier deal,” he said, in which any new part-time employees whose primary mission is to deliver on Sundays get a pay different from other full-time employees. “It poisons the well for all,” he said. He also said the group was not against the Sunday proposal.

A Teamsters spokeswoman contacted by Freightwaves pointed to a paragraph in a story on the negotiations in The Wall Street Journal as the operative statement. In it, a spokeswoman said the two sides “had not come to any agreement about hybrid drivers.” A UPS spokesman also said it is not discussing any specific issues in the negotiations.

With the end of the contract still several months off, the move by the Teamsters to dismiss three members of the negotiating committee does indicate that there are significant differences at this point. But there is also the question of whether the union, led by James Hoffa Jr., is being transparent with its membership. Paff said “there’s an idea that we should keep all things secret from our members, and no, we don’t believe that.”

The union has set up a website, UPS Rising, that focuses solely on the UPS negotiations. However, there is not much specific on the site, though it does acknowledge in one of the most recent updates that weekend work has been discussed. 

The union did vote on Tuesday to authorize a strike, but that is considered a normal part of the process several months ahead of contract expiration.

An overview of some of the issues facing UPS in the negotiations was written by Bank of America Merrill Lynch analyst Ken Hoexter in a report several months ago. It did not mention the possibility of seven-day delivery but noted that initial reports about the Teamsters demands included no use of drones and autonomous vehicles.

“We suspect UPS would not agree to restrict its ability to adapt to market changes, and it is possible the union could be using these terms as negotiating leverage,” Hoexter wrote. “Nevertheless, the need to counter such a concept that could stall the progress of the company partly reflects why UPS is now playing catch-up on its capex years after FedEx automated its Ground hubs. A lag in its capacity to adapt could remain an overhang on UPS shares each time Amazon announces a new package delivery initiative.”

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.