November 14, 2008: Enforcing our 9.5 protections against excessive overtime can save Teamster jobs in a recession.

UPS made after-tax profits of $1.6 billion in the third quarter. Brown is still the nation’s largest transportation company and still incredibly profitable, thanks to hard-working Teamsters.

But with the economy slowing down, UPS is looking to cut jobs and squeeze us even more.

After reporting a drop in volume for the third quarter, UPS’s Chief Financial Officer Kurt Kuehn told investor analysts, “We’re working hard to right-size our network for 2009.”

That’s corporate-speak for reducing jobs.

It’s happening already. UPS is cutting routes in some areas and forcing package car drivers to work unwanted excessive overtime.

Jobs on the Line

We don’t have the power to tell the UPS how to run its business. But we do have the right to hold the company to the contract.

Enforcing our 9.5 protections against excessive overtime is not just a matter of saving drivers’ sanity and family lives. In a recession, it’s a matter of saving members’ jobs.

Winning excessive overtime/9.5 grievances has become a major problem under the new contract. While some 9.5 grievances are being paid, the company is deadlocking many more at the grievance panels.

UPS is claiming all kinds of exceptions that were not bargained in the contract. Management says that “high mileage” and “high density” routes are exempt from Article 37 and that drivers on those routes cannot file 9.5 grievances.

In some areas, the company has tried to argue that they will only pay excessive overtime grievances on a small percentage of routes.

UPS’s goal in deadlocking grievances is to try to leverage new restrictions out of the 9.5 Committee—a joint company-union committee created by the contract that has the power to make new rules governing excessive overtime.

The 9.5 Committee met in San Diego at the national grievance panel. But nothing was resolved.

That suits the company just fine. By deadlocking and stalling, management has successfully bought time while they violate the contract. Now we’re in the November/December period when the 9.5 language does not apply.

New opt-in/opt-out lists are supposed to be posted for January when the issue of excessive overtime becomes even more serious. CEO Scott Davis told investor analysts that the company expects lower-than-usual volume next year.

In 2009, our union needs to be more effective holding the company to the 9.5 language they agreed to in the contract. Or drivers will be forced to work excessive overtime, while other drivers are laid off.

Taking Action

Coordinated rank-and-file action, including grievances, can protect Teamster jobs. A recent example from Local 804 in New York shows how.

UPS reduced the route of a senior package car Teamster and shifted his work to other drivers. On some days, the 18-year senior driver was forced to work as a cover driver.

“Drivers got together and agreed to file 9.5 grievances if we were forced to work excessive overtime because packages were diverted to our trucks. If a driver was swamped with overflow packages, other drivers didn’t volunteer to help out. If supervisors shuttled packages or made deliveries, we filed grievances on that,” said shop steward Liam Russertt.

As a result, management restored the driver’s route. By working together and filing 9.5 grievances, Teamster drivers can reduce layoffs and save Teamster jobs in 2009. But we need the backing of the International Union at the grievance panels.

If the International Union continues to let UPS stonewall 9.5 grievances, the price paid by working Teamsters won’t just be more hours in the truck. It will be more layoffs.

November 14, 2008: In its new contract with UPS, Chicago Local 705 won an additional optional day. Teamsters with more than 30 years also won an additional vacation week.

After giving some drivers the extra optional day, management tried to claim it had made an error and that drivers wouldn’t get the additional day until 2009.

Local 705 stood firm and the company backed down. Thousands of UPS Teamsters in Chicago are now enjoying extra time off this year.

November 14, 2008: UPS profits remain incredibly high—$1.6 billion in the third quarter—but volume is down. Ground package volume is down just 2.8 percent compared to the same quarter last year. Next Day Air volume in the third quarter fell by 9.8 percent.

Management is using the drop in Next Day Air volume as an excuse for eliminating Article 22.3 full-time jobs. Many of the positions that have been eliminated involve the air operation. But the company doesn’t have a leg to stand on.

The company tried to use the “loss of volume” argument to weasel out of creating full-time Article 22.3 jobs after the 1997 strike. Our union won that issue at arbitration and UPS not only had to create the jobs, they had to pay backpay too.

At that time, film director Michael Moore sent a debt collector to UPS to collect the full-time jobs on behalf of working Teamsters. Watch the video from The Awful Truth at www.makeUPSdeliver.org

November 14, 2008: UPS uses a two-month lag when adjusting its fuel surcharges. That means customers are paying a surcharge based on the price of gas two months ago when it was a dollar per gallon more expensive. You may not want to mention this when you’re making your pickups.

November 7, 2008: This year isn’t the first time UPS management has tried to avoid creating the full-time jobs they promised.

When UPS refused to create the full-time jobs we won in the 1997 strike, filmmaker Michael Moore sent Sal Piro to collect on behalf of working Teamsters.

Today, UPS is at it again. UPS is violating the contract which requires the company to maintain 20,000 Article 22.3 full-time jobs. The company is thousands of jobs short of that figure. UPS is even laying Article 22.3 Teamsters and forcing them back to part-time.

Maybe it’s time for another visit to UPS from Sal! Even better, the International Union should be conducting a national audit of Article 22.3 jobs and forcing the company to create the thousands of missing jobs now!

Click here to send us a message or question about what’s happening with Article 22.3 jobs in your area.

Click here to download sample grievance language on this issue.

October 22, 2008: Current and former drivers for FedEx Ground who were misclassified as contractors instead of employees would receive another $9.1 million in reimbursements for job-related expenses under a tentative ruling from a court-appointed referee, an attorney for the drivers announced Oct. 20 ( Estrada v. RPS Inc., Cal. Super. Ct., No. BC210130, tentative post-remand accounting report 10/8/08).

Retired California Superior Court Judge William J. Cahill's Oct. 8 ruling on nearly 50,000 expenses submitted by the drivers, who are members of a class, came more than a year after an appellate court ruled in favor of the drivers, who claimed they were employees and not contractors. The appellate court remanded the case to the trial court and ordered that it determine the expenses for which the drivers were entitled to reimbursement (157 DLR A-12, 8/15/07).

Cahill ruled in favor of the drivers on nearly all of the expenses submitted to the court for a wide range of expenses, including truck maintenance and registration, uniforms, fuel, and liability insurance, Lynn Rossman Faris, an attorney with Leonard Carder in Oakland, Calif., told BNA. He rejected only $32,000 of the claimed expenses.

Cahill, of the Judicial Arbitration and Mediation Service, was appointed by the court to determine the expenses owed to the drivers, and previously ruled they were due $5.3 million when the case was first in state trial court in 2005.

Judge Rejected FedEx Objections.

In his latest ruling, the judge rejected most of the objections FedEx raised, including arguments that many of the receipts were unreliable or lacking sufficient detail, or that many of the submitted vehicle expenses appeared to be related to personal vehicles and not FedEx trucks.

The judge also rejected arguments from the company that many of the expenses should not be reimbursed because they were based on copies of non-cancelled checks, many of which were made out to “cash,” and that copies of credit card or bank statements did not support the claimed expenses.

In most cases, Cahill said documentation and authenticating declarations from the drivers were enough to determine the drivers were entitled to reimbursement. FedEx generally failed to meet its burden to provide controverting evidence to refute the claimed expenses, he said.

The referee judge will issue a final post-remand accounting report Oct. 24. A hearing on the report is scheduled for Dec. 5 before Superior Court Judge William Highberger, Faris said.

In a written statement, FedEx spokesman Maury Lane told BNA the report is not yet final.

“The company will continue reviewing the recommendation and contest any disputed items,” Lane said. “It is important to note that there are several steps necessary—reviews, comments, and filings—before the judge can make a final ruling on this matter on these reimbursements.”

In addition to the issue of driver reimbursements, the trial court must also determine the amount of attorneys' fees due to the plaintiffs in the case, Faris said. A schedule to determine those fees has not yet been set.

FedEx purchased RPS Inc. in 1998 and renamed it FedEx Ground.

Delivery drivers are employees entitled under state law to reimbursement for work-related expenses, despite their description as independent contractors in an operating agreement they signed with FedEx Ground Package System Inc., a California appellate court ruled Aug. 13 (Estrada v. Fedex Ground Package Sys. Inc., Cal. Ct. App., No. B189031, 8/13/07).

Writing for a three-judge panel of the California Court of Appeal, Justice Miriam A. Vogel observed that “the parties' label is not dispositive and will be ignored if their actual conduct establishes a different relationship.” The court also upheld the certification of the case as a class action but sent it back to the trial court for a recalculation of the reimbursable expenses and a reduction in the amount of attorneys' fees to be paid by FedEx.

Anthony Estrada and Jeffrey Morgan sued FedEx under the California Labor Code for reimbursement of their work-related expenses. The trial court certified a class of 209 current and former drivers who performed pickup and delivery services for FedEx on a full-time basis in a single work area. The court found that the drivers were employees and ordered FedEx to reimburse some of their expenses—totaling roughly $5 million—and ordered FedEx to pay the drivers' costs and attorneys' fees, totaling roughly $12.3 million.

In this third appeal, the appeals court considered FedEx's challenges to the trial court's finding that the drivers are employees, the trial court's class certification order, its reimbursement awards, and its attorneys' fee award.

The trial court had found that, for purposes of determining the drivers' right to reimbursement for their expenses, the drivers are employees within the meaning of California Labor Code Section 2802. Subdivision (a) of Section 2802 provides that an employer must indemnify his employee for all necessary expenditures incurred by the employee in discharging his duties. The statute fails to define “employee,” so the appeals court looked to the common law, observing that “the essence of the test is the control of details” over the manner in which the worker accomplishes the work.

Justice Vogel analyzed the nonnegotiable “Pick-up and Delivery Contractor Operating Agreement” that each FedEx driver must sign. The agreement specifically identified the driver as an independent contractor rather than an employee. It set forth the parties' “mutual business objectives” and stated that the method of reaching these objectives was within the driver's discretion.

Drivers were required to lease a scanner, purchase or lease a truck meeting FedEx's specifications, mark the truck with the FedEx logo, and pay all costs for the truck. Frequently, drivers relied on a “business support package” from FedEx to fund this equipment, the cost of which they repay by deductions from their weekly “settlements” or paychecks.

However, the court said, the drivers were subject to strict oversight. They were expected to wear a FedEx uniform. Terminal managers supervised and trained them. They worked full time under hours set by FedEx and were forbidden to refuse a delivery. Each driver received an annual progress review. The appeals court concluded that “the drivers look like FedEx employees, act like FedEx employees, are paid like FedEx employees, and receive many employee benefits” and therefore were FedEx employees within the meaning of Labor Code Section 2802.

The court added, “FedEx's control over every exquisite detail of the drivers' performance, including the color of their socks and the style of their hair, supports the trial court's conclusion that the drivers are employees, not independent contractors.” Based on these facts, the appeals court rejected FedEx's contention that drivers were independent contractors.

Justice Vogel also upheld the trial court's certification of the class, noting that common issues predominated.

The appeals court also ordered the trial court to revisit the issue of the actual amounts to be awarded to the drivers for their expenses. At trial, there had been a misunderstanding between the parties' lawyers as to whether actual receipts for expenses, such as gasoline and maintenance costs, were required or whether spreadsheets would suffice. The appeals court said FedEx would “obtain a windfall if it was not required to reimburse the drivers for provable expenses that had been part of the case from the beginning.”

The appeals court also ordered the trial court to allow reimbursement for the drivers' work accident insurance premiums, which had been disallowed because they were erroneously characterized as “workers compensation.”

Attorneys' Fees.

Estrada had requested $619,691 in costs and $6,789,325 for attorneys' fees, a total of $7,409,016, plus a 2.0 multiplier as compensation for delay and contingency, for a total of $14,818,032.

The trial court reduced the fees by 18 percent and gave Estrada a total of $12,373,875 for costs and fees, citing the years of intensive litigation involving enforcement of an important right that conferred a significant benefit on a large class.

The appeals court upheld Estrada's right to recover the fees but found the amount “excessive.” It ordered the trial court to reduce the amount, noting that the same facts cannot be used to justify both the award and the multiplier. Even though the amount of the fees ultimately is within the trial court's discretion, it must be reasonable, Justice Vogel wrote.

The court also considered several issues raised on cross-appeal by the drivers. It rejected their contention that the trial court should have allowed them to prove their expenses by lay testimony and by expert analysis based on an economic model. The appeals court said such estimates and educated guesses are allowed where damages cannot be proved although here they could easily be proved by receipts and records. It also upheld the trial court's rejection of the drivers' contention that FedEx should reimburse them for the cost of leasing or purchasing their delivery trucks.

Justice Robert M. Mallano and Judge Frank Y. Jackson joined in the opinion.

Estrada and the other plaintiffs were represented by Lynn Rossman Faris of Leonard Carder LLP in Oakland, Calif.; Beth Ann Ross of Leonard Carder LLP in San Francisco; and Ellen Lake of Oakland, Calif. FedEx was represented by James M. Nelson of Seyfarth Shaw LLP in Sacramento, Calif.; Robert M. Schwartz of O'Melveny & Myers LLP in Los Angeles; Chris Hollinger of O'Melveny & Myers LLP in San Francisco; and Jonathan D. Hacker and Walter Dellinger of O'Melveny & Myers LLP, Washington, D.C.

By Laura Mahoney

September 19, 2008: UPS is cheating thousands of Teamsters out of full-time jobs.

Our contract gives us the right—and the power—to make UPS create these jobs.

It’s time for our International Union to enforce the contract with a national audit of Article 22.3 jobs.

Last month, Convoy Dispatch reported that UPS is violating the contract when it comes to full-time job creation. Since then, UPSers across the country have filed grievances to demand that UPS create more full-time Article 22.3 jobs.

The International Union needs to back members up by conducting a nationwide audit of Article 22.3 jobs to enforce our right to all of the combo jobs we went on strike to win in 1997.

Under Article 22.3 of the national contract, UPS is obligated to create and maintain 20,000 full-time combo positions. The deadline for creating all of these jobs was Aug. 1.

UPS is thousands of positions short of the 20,000 jobs required by the contract.

Reports from business agents and stewards from across the country reveal that not only has UPS virtually stopped creating new Article 22.3 full-time jobs, the company has eliminated full-time jobs in many areas by failing to fill positions when they become vacant.

In other areas, UPS is even laying off Article 22.3 employees and reducing them to part-time. UPS is not allowed to lay off any combo employees if the layoffs bring the total number of Article 22.3 jobs nationally to less than 20,000. There is no exception for “loss of volume.”

New Enforcement Tool

Our contract gives our union a powerful tool for enforcing our right to 20,000 full-time combo jobs. Article 22.3 requires the company to give the International Union a list that details and identifies all 20,000 combo jobs the company will maintain.

But the International Union has not provided this list to local unions, making contract enforcement much more difficult. When stewards and business agents do file grievances, management often claims that these jobs have moved to other areas.

The International Union has the means to put an end to this shell game. The Parcel Division should provide every local union with a list of the Article 22.3 jobs that UPS claims it is maintaining. Business agents and shop stewards could then compare the company’s list with the full-time jobs that are actually filled in the local.

Our International Union could then file a national grievance demanding that UPS create all 20,000 jobs with full backpay for Teamster members who should have been in these full-time jobs.

What Members Can Do

You can help protect full-time jobs.

Go to www.MakeUPSdeliver.org or call TDU to report contract violations in your area and get sample grievance language. You can also download or request leaflets so you can inform other UPS Teamsters in your local and put a spotlight on this issue.

Concerned Teamsters can also contact the Parcel Division at 202-624-8755. Tell them about the problem in your area and that you are ready to help our union conduct a national audit to enforce the contract and make UPS deliver all 20,000 full-time jobs the company owes us.

September 19, 2008: Local 177 has tried for months to get UPS management to address dangerous safety violations in the hub in Edison, N.J. Now the local is going public with its concerns.

The New Jersey Turnpike is now home to two prominent billboards letting UPS know it’s time to protect employee safety.

Local 177 has filed hundreds of grievances on safety violations in the Edison hub dating back to March.

Members report that packages are falling off of jammed belts from twenty feet in the air. Instead of dealing with this threat to worker safety, UPS management has stonewalled the grievances.

Management can try to hide from the problem, but Local 177 won’t hide the problem from the public. It’s time for UPS to put safety first.

September 19, 2008: The International Union has a new website design. But the same old information Brownout has continued for UPS Teamsters.

The Package Division has not published a single piece of news about UPS on the website since Dec. 19, 2007—the day the UPS contract was officially ratified.

The company is cheating members out of thousands of full-time Article 22.3 jobs and trying to worm out of restrictions on excessive overtime restrictions. UPS started allowing customers to start leaving ground packages at air boxes—a unilateral move that reduces the creation of new package car jobs and underpays air drivers.

There is not one word from the International Union on these and other pressing contract issues.

Strangely, as we go to press, one of the main items on the UPS page of www.Teamster.org is a link to an issue of the “UPS Teamster” from the Winter of 2004-2005. The column from President Hoffa in that newsletter starts, “While our candidate for President, John Kerry, did not win…” Talk about behind the times.

UPS Teamsters who want real news can visit www.MakeUPSDeliver.org and www.tdu.org. Sign up for email updates to get the latest on what UPS Teamsters are doing to enforce our contract.

September 30, 2008: Teamsters in several areas report that management is claiming that “high mileage” and “high density” routes are exempt from Article 37 language.

Management is even saying that drivers on those routes cannot file 9.5 grievances.

In some areas, the company has also argued that they will only pay excessive overtime grievances on 11 percent of their routes because statistically only 11 percent of its routes go over 9.5.

While the company is settling some grievances at the new triple time penalty, management has deadlocked many others.

UPS got enough concessions in the contract. The International Union should not let them use the 9.5 Committee to push through new restrictions before many Teamsters even have a copy of the contract!

What is management saying in your building? Click here to let us know.