UPS Reaches Tentative Deal With Teamsters, Lowering Risk of Union Strike

GLENDALE, CA - JULY 22: A United Parcel Service (UPS) driver delivers packages on July 22, 2010 in Glendale, California. UPS said its second quarter profit nearly doubled posting a net profit of $845 million, or 84 cents a share, compared to $445 million or 44 cents a year ago. Photo by Kevork Djansezian/Getty Images

The United Parcel Service (UPS) has made a tentative deal with workers, lowering the risk of a nationwide strike led by the International Brotherhood of Teamsters.

On June 29, the Teamsters Union said a “nationwide strike” was “imminent“ after walking away from the negotiating table, giving UPS a single day to return with its “last, best, and final offer.”

However, the union ultimately held off on carrying out the threat when UPS returned to the table with an updated deal.

UPS is the second-largest ground carrier of packages in the United States, only behind the U.S. Postal Service. The company delivers some 20 million packages per day, meaning that a protracted strike could be devastating for some industries and workers.

Despite the agreement to a deal that addresses many Teamster demands, the union has emphasized that other issues remain unresolved, and that the threat of a strike is still on the table.

Tentative Deal

Now, the Teamsters say they reached a deal with the delivery giant on July 1, diminishing the risk that they'll follow through on their planned strike.

“During a hard-fought day at the bargaining table, the #Teamsters reached tentative agreement with @UPS on three major economic issues: tearing down the 22.4 two-tier wage system, establishing Martin Luther King Day as a full holiday for the first time, and ending forced overtime on drivers’ days off,” a Twitter thread from the union reads.

The UPS 22.4 system, a key point of contention for the union, establishes a two-tier seniority system whereby many newer employees at UPS work under stricter conditions for less pay than their more senior peers, according to a grassroots Teamsters organization.

Established employees, including all those who worked for the company prior to 2018, when the 22.4 classification was negotiated, are dubbed “Regular Package Car Drivers” (RPCD).

For instance, 22.4 employees do not enjoy the same time-off benefits as more senior employees, who are allowed to refuse to work more than three hours of overtime per month under terms negotiated by Teamsters earlier. They also make less than RPCD drivers, despite having the opportunity to receive annual wage bumps as their experience with the company increases.

The new deal negotiated between Teamsters and UPS will do away with the system, immediately promoting all 22.4 employees to the rank of RPCD, which will in turn mean that current 22.4 employees see a pay increase when the new rules go into effect.

UPS commented on the revision to 22.4 status in a statement to The Epoch Times.

“UPS and the Teamsters have agreed to eliminate Article 22.4 positions from the next National Master Agreement. These roles, which were introduced during our 2018 negotiations with the Teamsters, were intended to provide UPS with the flexibility to meet increased consumer demand for weekend service. Under the new agreement, existing 22.4 positions would be converted to regular, full-time package car roles working Tuesday through Saturday schedules, and no package-car driver would be forced to work an unscheduled sixth day. This agreement allows UPS the flexibility to address our customers’ desire for weekend delivery.”

The company also said it was “pleased” to have been able to reach an agreement to allow MLK Day to be a guaranteed day off for workers.

“UPS has a long history of honoring Dr. Martin Luther King, Jr., whose life and legacy changed the world. His values align with our approach to service and underpin our ongoing commitment to diversity, equity and inclusion,“ the company said. ”Over recent months, and as part of our negotiations with the Teamsters, we’ve heard from UPSers that they would value MLK Day as a paid holiday to remember Dr. King and spend time giving back to their communities. Starting next year, MLK Day will be added as a paid day off for U.S. UPS employees. We are pleased that we were able to come to an agreement with the Teamsters on this employee priority.”

In addition, it will ensure that drivers are not forced to work on days they were previously scheduled to be off.

“The extraordinary gains, each of which have been key issues for #Teamsters throughout the yearlong contract campaign, came on the heels of an aggressive public warning from the Teamsters National Negotiating Committee that @UPS was running out of time to get a deal,” the Teamsters wrote on Twitter.

Strike Threats Continue

Teamsters General President Sean M. O’Brien applauded the deal, but emphasized that the threat of a strike was still on the table.

“Gains made by the Teamsters at the national table with UPS today cannot be overstated. From the jump, UPS knew we demanded an end to forced overtime, the respect to take MLK Day as a real holiday, and the complete destruction of the unfair 22.4 wage system,” O'Brien said. “The Teamsters have achieved these critical tentative agreements for our members.”

“But make no mistake,” O'Brien added. “We are not done. UPS knows we must reach full agreement on other economic issues, including higher wages, within the next few days.”

O'Brien said the Teamsters hope to have the new contract and benefits negotiated go into effect on Aug. 1. But as he emphasized, other issues remain unresolved, meaning the threat of a strike remains on the table.

“We have repeatedly told UPS that a new contract must be in place by August 1. The Teamsters will not work one minute beyond the expiration of our current agreement. UPS did not want to make progress on economics, but they conceded today that they will reach a deal by July 5 because they have no choice,” O’Brien said in a statement.

The Teamsters have said UPS made record profits in recent years. But in the first quarter of 2023, profits, volume, and revenue have all dropped year-over-year. The company also warned of a possible economic downturn around the world.

If there is a strike, reports indicate that it would be the largest one against a single employer in U.S. history. UPS is the largest unionized employer in the private U.S. sector. CNN reported that about 6 percent of the U.S. gross domestic product, or GDP, is moved on board UPS trucks each year.

The day after the deal, the Teamster Union made clear that the deal would not guarantee that UPS Teamsters won’t strike.

In a thread posted to Twitter, the union said that in spite of the agreement, “practice picketing actions will not let up.”

A photograph attached to the tweet showed UPS employees engaging in mock demonstrations in preparation for a potential strike.

“It’s time to keep the pressure on!” the union wrote.

“#Teamsters are continuing to exert enormous pressure on @UPS to concede to the demands of the hardworking members who make the company its multibillion-dollar profits. And no one can doubt UPS Teamsters are ready to #strike if the delivery giant fails to meet those demands.”

Jack Phillips contributed to this report.