UPS Employees Union Votes to Override 3 Local Bargaining Units

Laura Stevens and Melanie Trottman
The Wall Street Journal
April 24, 2014

The national union representing United Parcel Service Inc. employees overrode three local bargaining units that had delayed approving parts of a five-year national contract with the delivery company.

The unusual move, described Wednesday in an internal memo reviewed by The Wall Street Journal, took local union leaders by surprise. The Teamsters union said the UPS national negotiating committee "voted overwhelmingly" to declare the new contract in effect.

This decision superseded rejections by three locals of parts of the national contract, known as riders or supplements, that address issues such as wages for part-time employees, pension contributions and overtime restrictions.

"UPS has not been officially notified by the International Brotherhood of Teamsters on this issue. We are not able to comment further," a spokesman for UPS said.

UPS has been working to implement a five-year master contract that was approved in June by a majority of the Atlanta-based company's domestic package-delivery employees. But the contract wasn't supposed to take effect until local unions resolved all outstanding supplements and riders.

The national Teamsters' decision comes at a time when UPS has publicly struggled with labor relations. Earlier this month it was forced to rehire about 250 New York-based drivers it fired after they walked off the job in protest of what they said was unfair treatment of a fellow driver. Labor negotiations with the locals had dragged on months longer than expected.

"The reaction [from UPS union members] is enormously hateful," said Ken Paff, head of splinter group Teamsters for a Democratic Union. "You're robbing these people of their right to vote." He said that the faction is weighing challenging the decision in court.

The move to approve the contract is unusual, labor lawyers agreed, but sharply declining union membership over the years has put more pressures on union officials to agree to pension and health-care benefits that their members often resist.

While a national union "certainly has the right" to override locals in certain circumstances, there can be a downside for the union, said Michael Lotito, a San Francisco-based attorney who represents employers and who co-chairs law firm Littler Mendelson's Workplace Policy Institute. "It undercuts the authority and prestige of the local" and can contradict the national union's messaging that the local controls its own destiny, he said.

Union membership numbers have declined sharply over many years and were stagnant in 2013. Union officials are also under pressure to agree to pension and healthcare benefits that their members often resist.

In the memo, the national committee said it had the authority to implement the contract if locals were rejecting it on the basis of language that had been approved. The memo said the three locals that had rejected their riders and supplements did so based on changes to the employees' health-care benefits—something that had already been decided in the national contract.

"Ninety-five percent of our UPS members have already voted to approve their agreements, and UPS currently owes Teamster members and our funds more than $300 million in wages and contributions," the national negotiating committee said in the memo. UPS has agreed to expedite these payments, the union said.

The agreement becomes effective Friday, and changes to health care will take effect June 1.

Teamsters Local 89, which represents about 8,000 UPS employees at the company's air hub in Louisville, Ky., overwhelmingly voted down its rider twice, and it's "flat-out untrue" that health care was the sticking point, said that local's president, Fred Zuckerman. A third rejection might have authorized the employees to strike, he said, adding that the decision took him by surprise. The local will try to determine if it can contest the decision.

"This is just a disaster for the membership," he added. Negotiations have "been a game right from the beginning."

The Louisville local was pressing UPS to take measures to help workers get from the parking lot to their areas of work at the Worldport air hub more quickly, including deploying more shuttles and metal detectors, Mr. Zuckerman said. He also said his local's latest rejection of the contract had been prompted by the company's removal of a pension-contribution increase for some workers.

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