BNA Daily Labor Report: 9,900 UPS Freight Workers Joining under New Agreement

April 9, 2008: Members of International Brotherhood of Teamsters have ratified by an 89 percent majority a 64-month national UPS Freight agreement to cover an estimated 9,900 truck drivers and dockworkers at 136 terminals nationwide, the union announced April 7.

Voting took place March 29 through April 6 at about 80 union halls across the country, IBT said. Most of the voting took place April 5-6, with the final tabulations completed April 7, according Ken Hall, director of IBT's parcel division.

The new contract provides for a general wage increase of $4.35 per hour over term for full-time truck drivers and dockworkers, while maintaining previous health care benefits at no increased cost to employees, Hall said. The contract became effective April 7 and extends to July 31, 2013, he said.

"This ratification vote is overwhelming by anyone's standards. I am thrilled with this vote," Hall said.

"We believe this contract is good for our people, good for our customers, and good for the company," UPS Freight spokesman Ira Rosenfeld said April 7. "The ratification follows a smooth and orderly process that had no impact on the service levels to our customers, while fully respecting the rights of the employees to the union representation of their choice," Rosenfeld said.

Card-Check Organizing Moved Quickly

The new agreement is a first contract for most of the UPS Freight employees, Hall said, although the company and IBT last year negotiated a contract covering a 125-employee bargaining unit at a UPS Freight terminal in Indianapolis (196 DLR A-7, 10/11/07). The Indianapolis contract negotiated last remains in effect and separate from the newly negotiated agreement, the union said.

The Indianapolis agreement was announced shortly after the union and Atlanta-based UPS announced they had reached tentative agreement on the larger contract to cover nearly a quarter-million UPS package delivery employees (190 DLR A-1, 10/2/07). UPS Freight, formerly known as Overnite Transportation, is a subsidiary of UPS.

A "card-check" agreement between UPS Freight and IBT allowed the union to begin organizing the company quickly on a national scale in mid-January, Hall said (12 DLR A-7, 1/18/08). Under the agreement, bargaining units are recognized by the company once union organizers have collected authorization cards from more than 50 percent of employees in the bargaining unit, and after an independent arbitrator has certified the validity of the authorization cards.

Units representing about 9,900 UPS Freight employees had been certified as of April 4, Hall said. At the time the tentative agreement was approved by local union leaders in late March, IBT said some 9,600 employees had been organized through the card-check process at that point (59 DLR A-12, 3/27/08).

The union estimates that another 2,700 company employees working at other UPS Freight terminals are potentially organizable by the IBT, Hall said, and union organizers believe that most of these will choose to be represented by the Teamsters before the end of the year.

Wage Hikes Effective Twice Annually

The new contract provides for general wage increases for so-called "city drivers" totaling about $4.35 per hour over the term of the agreement. Prior to the new contract, city drivers earned about $21 per hour, according to a copy of the tentative agreement.

Under the contract, the city drivers will receive wage increases about 35 cents per hour in 2008, 70 cents per hour in 2009, 75 cents per hour in 2010, 80 cents per hour in 2011, 85 cents per hour in 2012, and 90 cents per hour in 2013.

In each year of the contract, except 2008, annual increases would go into effect in two intervals. One half of the annual increase will go into effect on Jan. 1, with the second half of the increase going into effect on July 1, according to the agreement. The 2008 increase of 35 cents per hour is payable July 1.

Similar wage increases will be provided to dockworkers who are employed on the terminal site itself, and to so-called "road drivers" involved in the long-haul transport of freight, Hall said. The wage rate of a full-time dockworker, for example, will rise from the previous $21.22 per hour to $25.10 per hour, or by $3.78 per hour, over the life of the contract. Road drivers will receive a the mileage rate increase of 11 cents per mile over the life of the contract, an amount intended to provide an equivalent income to the hourly wage increase that will be received by the road drivers, the union said.

The wage increases are very similar to those negotiated for the Indianapolis agreement, Hall said, but are modified to reflect the fact the Indianapolis agreement was ratified about six months before the new national agreement was ratified.

Health Care and Pension Provisions

The new contract establishes a new health care plan to provide coverage to IBT represented employees, Hall said. To be called the United Parcel Service Health & Welfare Package Select, the company self-insured plan will have benefits similar, or better than, benefits provided under the previous health care plan, he said.

Employees covered by the contract are required to make monthly contributions to the cost of the plan, he said. Employees will pay $50 per month for single coverage, $100 per month for couples coverage, and $150 per month for family coverage. These contribution levels will remain fixed for the life of the contract, Hall said.

Retirees who will receive health benefits under the plan will pay $250 per month for individual coverage and $500 per month for couples coverage.

The new health care plan will be an improvement for most covered employees, Hall said. He said that contribution levels have been rising in recent years by about 7 per cent per year, so union-represented employees will benefit immediately by contractual protections against further increases during the life of the contract. Furthermore, union-represented employees with full family coverage will see a decrease in their monthly payments of $83, from $233 to $150, he said.

Similarly, UPS Freight employees represented by IBT will be covered by a company-managed pension plan, known as UPS Pension Plan. Hall said the benefits are similar to those that were offered under the previous plan, and no contributions from the employees for this plan are required.

Contract Has National Coverage

Major cities where the union said it has collected enough authorization cards to qualify for certification are Atlanta, Baltimore, Chicago, Cincinnati, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Memphis, Tenn., Minneapolis, Phoenix, Pittsburgh, San Diego, St. Louis, and Washington, D.C.

Terminals in smaller cities where the union said it has collected enough authorization cards to qualify for certification are in the states of Alabama, Arizona, Arkansas, Colorado, Georgia, Florida, Kentucky, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Washington, West Virginia, Wisconsin, and others.

The contract expires July 31, 2013.

The IBT-UPS Freight Agreement may be accessed here.

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