UPS, Teamsters announce tentative deal days before contract was set to expire

UPS and the International Brotherhood of Teamsters announced Tuesday a tentative collective bargaining agreement — just days before their current contract was set to lapse.

“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,” UPS CEO Carol Tomé said in a statement.

“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

The company said the five-year agreement would cover “Teamsters-represented employees in small-package roles.” It is still subject to approval by union members.

The new deal includes higher wages for Teamsters workers, air conditioning in trucks and an agreement to hire 30,000 new drivers.

Teamsters threatened to strike starting next Tuesday, as the contract covering 340,000 workers expires on July 31. With a tentative agreement in place, work will continue as the contract is voted on by union members next month.

“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits. Teamster labor moves America. The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” Teamsters General President Sean O’Brien said in a statement.

A Teamsters UPS strike would have been the largest private sector strike in U.S. history and could have upended national supply chains, experts said.

President Biden, who O’Brien had recently asked to not intervene if UPS workers strike, applauded the two parties for coming together, saying the announcement is a step closer “to a better deal for workers that will also add to our economic momentum.”

“This agreement is a testament to the power of employers and employees coming together to work out their differences at the bargaining table in a manner that helps businesses succeed while helping workers secure pay and benefits they can raise a family on and retire with dignity and respect,” Biden said.

Contract negotiations initially broke down in early July, but picked up again this week as the July 31 deadline grew nearer. The negotiations also faced political pressure, as notable Senate Democrats vowed to stay out of the fight and support striking workers.

UPS and the Teamsters were at odds over part-time worker pay and promotions to full-time hours. The union railed against a “two-tier” wage system where part-time drivers make significantly less money per hour than full-time drivers. 

The groups agreed to eliminate that “two-tier” system, Teamsters said, and agreed to raises for both part-time and full-time drivers. Workers will get a $2.75-per-hour raise this year and $7.50 more per hour by the end of the contract, Teamsters said.

The wage minimum for part-timers will also rise to $21 per hour. The union said the average part-time driver will receive a 48 percent raise by the end of the contract.

The two sides previously agreed on a slate of safety issues, including adding air conditioning to all UPS delivery trucks by next year. The agreement also limits forced overtime and reduces extended holiday work to five weeks in November and December.

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“UPS came dangerously close to putting itself on strike, but we kept firm on our demands. In my more than 40 years in Louisville representing members at Worldport — the largest UPS hub in the country — I have never seen a national contract that levels the playing field for workers so dramatically as this one,” Teamsters General Secretary-Treasurer Fred Zuckerman said in a statement.

“The agreement puts more money in our members’ pockets and establishes a full range of new protections for them on the job. We stayed focused on our members and fought like hell to get everything that full-time and part-time UPS Teamsters deserve,” he said.

The agreement also promises that UPS will create 7,500 new Teamsters jobs and fill 22,500 job vacancies, the union said.

Leadership from Teamsters locals will review the deal on July 31 and voting will be conducted among members Aug. 3-22.

Updated at 3:22 p.m.