IBT, UPS Announce Contract Ratification, Will Negotiate to Resolve Supplement Issues

Susan Hobbs
BNA Daily Labor Report
June 27, 2013

The International Brotherhood of Teamsters and United Parcel Service Inc. June 25 announced the majority of voting union members have voted to ratify a five-year labor contract covering 237,000 workers, but have rejected many regional supplements that will require further negotiations and voting before the master contract can be finalized. Union members voted 34,307 to 30,202 to ratify the proposed contract.

Union procedures require the approval of all supplements or riders before the national agreement can go into effect.

Also, a majority of union members voted decisively against ratification of a separate tentative UPS Freight contract for 13,000 workers. The Teamsters mail ballot results showed IBT members employed by the UPS Freight division voted 4,244 to 1,897 against the deal.

This means the Teamsters and UPS will be returning to contract negotiations on the UPS Freight contract and on the UPS supplements. The current contracts are set to expire July 31.

'Business as Usual' During Negotiations

In the meantime, John McDevitt, UPS senior vice president of human resources and labor relations, June 25 said, “It will be ‘business as usual' while UPS and the IBT resolve remaining issues and Teamster-represented employees ratify new agreements.”

Both the union and company said they are committed to engaging in further negotiations on the UPS Freight and the supplemental agreements.

“UPS is committed to quickly resolving remaining issues on UPS Freight and supplemental agreements. This is part of the normal negotiating process and UPS is confident that these contracts will be resolved soon,” the company said in a statement.

The Teamsters said: “The negotiating committees responsible for those supplements and riders will be talking with the members in their areas. In the meantime, the Union will schedule meetings to engage the company in further negotiations to achieve our members' objectives.”

Health Care Benefits Attributed for Supplements Vote

A change in health plans under the UPS supplemental contracts that would affect some regions less favorably than others was a factor in union members' rejection of 17 supplements, Ken Paff, organizer for the dissident group Teamsters for a Democratic Union, told BNA June 24.

TDU presented preliminary vote counts earlier in the week as the Teamsters posted vote results, by local, on its website.

The Teamsters acknowledged that a change in health care benefits was one reason union members voted against a record number of supplements. “A provision that moves 140,000 members from a company-sponsored health insurance plan into a plan that is jointly trusteed by employers and the Teamsters Union contributed to some of the supplements being rejected by the members,” according to the union.

A shift of Teamsters members currently in the UPS health care plan into the Teamsters-controlled Central States health care fund “was made because during negotiations, UPS said it would cut health benefits that members currently receive in the company plan and raise the cost to employees significantly,” IBT said June 26 in a statement. The Teamsters said the move would maintain current benefits for UPS employees while increasing the health care funds for IBT-represented workers in all industries.

Paff said, however, that benefits would change for employees in some areas of the country but would remain unchanged in other areas.

Union members at UPS voted for the supplements in regions where health care benefits would not change, including the Mid-Atlantic, Southern, and New England regions, Paff said. In Southern California, the Southwest and Central regions, Pennsylvania, New York, and New Jersey, however, where the health care benefits would be reduced, union members voted against the supplements, he said.

The UPS contract continues health care benefits for full-time and part-time employees, with no contribution to the premium.

Part-time employees' dependents will be covered after 12 months, six months sooner than the 18-month wait under the previous contract.

Retiree health care costs will increase incrementally with a cap of $150 per month for individual coverage and $300 per month for families by the end of the five-year contract term.

Teamsters, UPS Freight to Resume Negotiations

The Teamsters will be talking with union members employed by UPS Freight about their priorities for the collective bargaining negotiations that will resume soon.

According to TDU's Paff, union members voted against the UPS Freight proposal because it included “a two-tier deal to create a ‘line haul' division at essentially non-union pay, inadequate pensions, and inadequate wage increases.”

IBT members at UPS Freight rejected the tentative contract because they want better wages, better pensions, and better job protection than the tentative contract offered, Paff said. They want to end subcontracting and get their long-haul jobs back, he added.

The UPS Freight tentative contract would have increased hourly wages $2.50 over a five-year contract term.

Mileage under the UPS Freight proposal would have increased 0.0125 cents per mile in each year of the tentative contract.

The tentative settlement proposed to shift pension coverage for UPS Freight employees from the UPS Retirement Plan to the UPS Pension Plan after Dec. 31, 2013.

Pension benefits would have increased for most UPS Freight employees under the proposed agreement.

UPS Freight road drivers on layoff at facilities where subcontractors are being used would have been recalled within 90 days after the effective date of the tentative contract.

The proposal also would have strengthened limitations on subcontracting, according to the Teamsters' summary. A new line haul driver position would have been created for runs that first would have had to be reviewed and agreed upon by a UPS Freight/Teamsters competition committee. The proposed procedure was meant to help identify two-way runs, which would require UPS Freight to add jobs to the road driver classification, according to the Teamsters' summary.

Wages to Increase $3.90 Over UPS Contract Term

National negotiations began in late September 2012 with the Teamsters National UPS and UPS Freight Negotiating Committees vowing to protect pensions and health care.

Teamsters, UPS, and UPS Freight April 25 reached tentative five-year agreements on separate national contracts covering 250,000 full-time and part-time workers more than three months in advance of the July 31 expiration of the current contracts.

When the tentative agreements were reached, union leaders said the labor deals would meet members' top priority of protecting health care benefits, significantly raising employer contributions to pension and health and welfare benefits, and providing substantial wage increases.

In May, local union leaders endorsed unanimously the tentative agreements with United Parcel Service Inc. and UPS Freight.

The UPS Teamsters contract increases wages $3.90 over the five-year contract term and increases starting wage rates for both full-time and part-time employees. Under the new contract, 2,350 full-time jobs will be created during the first three years.

UPS workers' wages will increase 70 cents per hour in August 2013, 2014, and 2015, followed by wage increases of 40 cents per hour on both Aug. 1, 2016, and Feb. 1, 2017, and 50 cents per hour on both Aug. 1, 2017, and Feb. 1, 2018.

The UPS full-time starting rate will increase to $18.75, up from $16.10 currently. The wage progression for new hires as of Aug. 1, 2013, in “a package car driving, feeder, or another full-time job” will increase to 48 months. Employees currently in progression will continue with the 36-month progression.

The starting hourly wage rate for part-time employees will increase to $11 for preloaders/sorters and $10 for all others, up from $9.50 and $8.50, respectively, under the current contract.

UPS Pension Changes

UPS employees' pension benefits will increase effective Jan. 1, 2014, for employees retiring after 35 years of service to $3,700 per month, up from $3,500 currently. Effective Jan. 1, 2017, pension benefits will increase to $3,900 per month.

Effective Jan. 1, 2014, employees retiring with 30 or more years of service will receive $3,200 per month, up from $3,000 currently, plus $100 per year of service up to $3,700. On Jan. 1, 2017, those benefits will increase to $3,400 per month plus $100 per year of service up to $3,900.

Part-time UPS employees retiring after 35 years of service will receive pension benefits of $2,100 per month, an increase from $1,925 under the current contract.

Part-time UPS employees retiring after 30 years of service will receive pensions of $1,800 per month, up from $1,650 currently.

Part-time workers retiring at age 60 after 25 years of service will receive $1,500 per month, up from $1,375 currently. Part-time workers retiring at any age younger than age 60 with 25 years of service will receive pensions of $1,250 per month, up from $1,125 currently.

UPS Work Rule Changes

The UPS contract also provides protections from harassment and intimidation of workers by supervisors, including discipline, threats, and intimidation based on technology, long work hours, retaliation for grievance filing, and inadequate staffing of delivery centers.

The contract prohibits employee discharge based solely on information received from global positioning system technology unless the employee intentionally defrauded the company. The contract also requires GPS information to be confirmed by direct observation or another form of corroborating evidence.

The previous contract only prohibited such a discharge on a first offense.

Also, the new contract prohibits discipline of any employees whose electronic device was used by another worker to perform work.

New language in the UPS contract addresses limits on hours for drivers who have worked more than 9.5 hours a day three times in any week.

Workers' access to the 9.5 list will be easier under the new contract, according to the union. For drivers on the list, the employer is required to make a reasonable effort to reduce their workdays below nine and one-half hours per day.

Workers will have access to penalty pay on the first week of a 9.5 violation and will be protected against retaliation for filing 9.5 grievances. The contract also allows the union to address inadequate staffing, according to the contract summary.

Inadequate staffing issues at delivery centers could be subject to arbitration under the UPS contract.

New contract language prohibits retaliation against workers who file grievances.
The UPS contract will expire July 31, 2018.



It is high time to make UPS truely share Their Billion Dollar profits with us. We earn every penny of what we are compensated and we are falling behind. Meanwhile Supervisors and all the way to the top of the management chain are retiring as Millionaires.

I for one am sick and tired of having a National Contract that provides a benefit and then have the Regional Supplement take that benefit away. For example, The National provides a 2 hour pay penalty for violating an 8 hour request (working beyond 8.5 on an 8 hour day). Then the Regional Supplement takes the penalty pay away because it addresses 8 hour days and doesn't state the penalty. Thus, management has no reason to dispatch us to provide a true 8 hour day.

UPS doesn't want to even hear the whisper of STRIKE. So why are the International Union Officials who we hire with our dues so affraid to get us our true share of the pie that we create for UPS.  I know a strike is not fun. I was there for the last one. But it made them start taking us seriously (Thank you Ron Carey).

You chose your path and management chose theirs. You work long hours, but your managers are there daily at 6am, and sometimes even work the preload. You enjoy free healthcare while your management teams pay upwards of $500 a month. If you think ups can stay the number one shipping company in the world while still giving out free benefits to their employees, that is foolish. I understand how hard all upsers work.  We all give our blood sweet and tears, regardless if you are hourly or management.  Be thankful you work for the biggest shipper in the world and make $10/hour more than your competitors. Like I said you chose your path.