UPS and the Teamsters Union reached a tentative agreement today for a new labor contract. The current contract expires on July 31, and the Teamsters had already voted to authorize a strike if a deal was not reached in time. The national master contract, in addition to many regional contracts, will need to be ratified by majority votes of Teamsters membership. The ratification process is expected to last until August 22.
“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,” said UPS CEO Carol Tomé.
“We demanded the best contract in the history of UPS, and we got it,” said Teamsters president Sean O’Brien.
According to the Teamsters’ statement, the tentative five-year contract includes an immediate raise of $2.75 per hour, with a $7.50 raise by the end of the contract. The average top rate for delivery drivers will increase to $49 per hour. The new minimum wage for part-time workers will be $21 per hour. The “22.4” driver classification, which was created during the last contract negotiation between UPS and the Teamsters, has been eliminated.
“22.4” referred to the section of the contract that created the classification, which was a more flexible junior-driver position that worked Tuesdays through Saturdays. The elimination of the classification was a major goal for the Teamsters during this round of negotiations, as they viewed it as unfair to have a second classification of full-time drivers doing roughly the same job for lower pay rates. It was likely easier for UPS to agree to that now, during a period of falling package demand when it is looking to cut costs. UPS laid off many “22.4” workers earlier this year.
All of O’Brien’s tough talk about how UPS was a “white-collar crime syndicate” and a strike was “inevitable” has suddenly transformed. “This contract sets a new standard in the labor movement and raises the bar for all workers,” O’Brien said. Union members now get to decide which version of O’Brien’s comments they believe. After months of hyping a strike, and winning glowing profiles and adoration from national media, O’Brien is now telling them he got a contract that “doesn’t require a single concession.”
As last year’s freight-rail labor negotiations demonstrated, union membership is not always on the same page as union leadership. When leadership negotiated a deal mediated by the Biden administration and pitched it to membership, some unions voted against it. Congress, under the Railway Labor Act, intervened to adopt the contract and prevent a strike.
No such provision exists for UPS, whose labor relations are governed by the Wagner Act. Ratification is not as difficult for UPS as it was for the railroads. There are twelve railroad unions that all had to separately ratify 13 contracts, compared with only the Teamsters at UPS.
Ratifying the deal is in the Teamsters’ best interest. UPS is one of the few large, private-sector employers that have a strong relationship with organized labor, and it seeks to maintain it. Striking against one of the few employers that have added a significant number of unionized jobs over the past decade would make little sense. This tentative agreement should keep the trucks running.