UPS Volume and Our Right to Full-Time Jobs
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
Fuel Surcharge: Coal in Customer’s Stockings
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.
“Awful Truth” Video on UPS Full-Time Jobs Scam
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.
BNA Daily Labor Report: $9.1 Million Owed to Misclassified FedEx Ground Drivers
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
Time to Stand Up for Full-Time Jobs
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.
Billboards Blast UPS Safety Violations
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.
Information Brownout Continues for UPS Teamsters
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.
UPS Wants Loopholes on Excessive OT Grievances
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.
No Reciprocity With New UPS Pension Fund
September 19, 2008: The new UPS Pension Fund covering 44,000 Teamsters in the Central States not only offers the lowest benefits; it also has no reciprocal agreements with Teamster pension plans around the country.
That means that UPSers in the Midwest, Southeast and Southwest who have substantial years worked under other pension plans will face stiff pension reductions when they retire.
Most (though not all) Teamster pension funds have reciprocal agreements. For example: a Teamster who worked 15 years for UPS in California and then 15 years at UPS or another Teamster employer in Ohio can retire with a 30 and out pension. That’s because the Western Conference Pension Fund and Central States Pension Fund have a reciprocal agreement.
But the new UPS Pension Plan has no such agreements. That may not be a problem right now because no one has substantial time in the new UPS Pension Fund yet. But going forward, Teamsters who accumulate less than a full pension in the UPS Plan will suffer big pension reductions even if they have 25, 30 or even 35 years of time served in the Teamsters.
Didn’t our negotiators see this coming? It’s a problem that needs to be fixed before working Teamsters suffer irreparable pension losses.
Central States Pension Fund Loses $3 Billion
August 21, 2008: The Central States Pension Fund lost $3.1 billion in assets during the first six months of this year—half the $6.1 billion UPS paid to leave the fund in December.
In the first half of 2008, the fund lost $2.2 billion on their investments, or eight percent of their assets. At the same time, they suffered a $287 million loss of income, compared to the first half of last year, because UPS is no longer contributing to the fund.
The investment losses during the first half of 2008 came as stocks dropped dramatically. Central States fared worse than most other pension funds due to their aggressive investment strategy: their Quarterly Report provides a comparison to the average of other large funds.
When the Hoffa administration gave UPS management the pensions of 44,000 full-time UPSers, they told Teamster members that the deal would work out well for the Central States Fund, because of the $6.1 billion received.
Just six months later that claim is not standing up to the test of time.
Central States has lost $600 million per year in contribution income that UPS would have had to pay in. And that income figure would grow rapidly each year, with the higher employer contributions bargained in the last contract.
Central States assets stood at $23.7 billion as of June 30, so there is still plenty of money to sustain benefits.
You can download a copy of the Quarterly Report of the Independent Special Counsel, and the Quarterly Financial and Analytical Information.
TDU members won an order in federal court that requires the Central States Fund to provide us with this information. Previously, the fund kept this information secret from members.
Have a question? Click here to send a question to Teamsters for a Democratic Union, or call (313) 842-2600.
You can support TDU’s work to safeguard our pensions by joining TDU. Click here to join today.