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UPS Freight rejects deal with Teamsters

By John D. Schulz, Contributing Editor and Jeff Berman, Group News Editor
June 25, 2013

Following news of a tentative agreement between the International Brotherhood of Teamsters and transportation and parcel bellwether UPS roughly two months ago, it now appears that the deal is off.

On its Website, the Teamsters reported yesterday that UPS Freight Teamsters members rejected the deal by a 4,244-1,897 margin.

According to Teamsters for a Democratic Union, the national contract will pass with 53 percent of the vote, but it added that “most of the members will be voting again, perhaps more than once, because of the rejection of most supplemental agreements.”

Regarding UPS Freight, TDU said that the two-tier deal to create “Line Haul” drivers at essential nonunion wages and conditions has been rejected, stating that the inadequate wages and pension improvements have been rejected

In late April, UPS said it had reached a tentative agreement with the Teamsters on two, new five-year contracts for UPS’s small package and freight (less-than-truckload) business units.

These contracts cover roughly 250,000 UPS and UPS Freight employees, according to Teamsters for a Democratic Union (TDU).

UPS added that the tentative contracts were hammered out well ahead of their July 31, 2013 expiration date and need to be presented to the UPS Teamsters-represented employees for ratification. When the contracts are officially ratified, UPS said the new agreements would take effect on August 1, adding that the new contracts enable UPS to remain highly competitive, customer-focused, and positioned to deliver transformative technologies growing areas of the company like healthcare logistics and e-commerce on a global basis.

Teamsters officials said in April that that the tentative agreement for UPS package employees moved 140,000 employees into the Teamsters-controlled health plans to maintain current strong benefits for all UPS Teamsters and also grow funds for Teamsters for all industries into the future.

The Teamsters also said that for UPS Freight the tentative agreement resolved subcontracting issues by putting all laid-off road drivers back to work, with UPS Freight employees receiving substantial wage increases and lower co-pays for health insurance, coupled with providing the ability for more part-time workers to become full-time employees.

The possibility of this deal coming to fruition has ostensibly been in flux for the last several weeks, with the Teamsters Union having drawn a line in the sand over health care in labor negotiations with UPS, which floated the idea that the 260,000 Teamsters for the first time make a small co-pay contribution toward their health care premiums.

During a negotiation session in March, Teamsters union President James P. “Jim” Hoffa said a group of Teamsters began chanting, “We won’t pay!!” in a loud display of their opposition to the proposal, adding that it was a non-starter for the union.

Prior to that announcement, UPS officials repeatedly declined to negotiate publicly and refuse to discuss any details of their negotiating strategy.
 
Ken Hall, the Teamsters’ general secretary treasurer and the union’s point man for the Teamsters negotiations with UPS, said in March that the talks were tough but that was not a surprise. UPS, though, had expressed a desire for an early settlement to avoid any freight diversion to non-union carriers.
 
“The ball is in UPS’s court,” Hall said in March. “If they don’t want shippers to walk away, it’s in their best interest to agree to a fair deal.”

Wolfe Trahan analyst Ed Wolfe wrote in a research note that his firm’s initial sense is that the economic impact to UPS from the deal announced in April seemed more favorable than past contracts, adding that the relatively early agreement also seems like a near-term positive for UPS and negative for FedEx.

About the Author

John D. Schulz, Contributing Editor and Jeff Berman, Group News Editor

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Article Topics

News · UPS · Teamsters · UPS Freight · All topics

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