Tentative UPS Contract
BNA Daily Labor Report: UPS Tries to Shortchange New Jersey Health and Welfare Fund
October 5, 2007: From the BNA Daily Labor Report: Officers and members of a local Teamsters union must arbitrate with United Parcel Service of America Inc. (UPS) on the issue of whether UPS must contribute on union members' behalf to two UPS-sponsored and administered health and welfare plans at rates set out in bargaining agreements, the U.S. District Court for the District of New Jersey ruled Oct. 2 in an unpublished decision (Palumbo v. United Parcel Service of America Inc., D.N.J., No. 06-CV-5331 (DMC), unpublished 10/2/07).
According to the court, UPS employs approximately 235,000 workers in the United States who are represented by the Teamsters. Most Teamsters-represented UPS employees also are members of a Teamsters local. UPS has a collective bargaining agreement with the national Teamsters union as well as local supplemental bargaining agreements which apply to employees in particular geographic areas and/or local unions.
Unlike most full-time Teamsters-represented employees at UPS who receive health and welfare benefits under jointly-trusteed plans, full-time employees of UPS who are represented by Teamsters Local 177 are provided health and welfare benefits from two plans that are funded, administered, and controlled solely by UPS. These two UPS-sponsored plans are funded through a voluntary employees' beneficiary association, according to the court.
Victor Palumbo, as the President and Secretary Treasury of Teamsters Local 177, along with seven Local 177 members filed a lawsuit against UPS in November 2006 contending that UPS had breached its fiduciary duties under the Employee Retirement Income Security Act by failing to make contributions to the UPS plans at rates specified in UPS's master labor agreement with the national Teamsters union. According to the court, the plaintiffs based their claim on a provision in the master agreement that dealt with UPS's obligation to make contributions to jointly-trusteed benefit plans.
Judge Dennis M. Cavanaugh granted UPS's motion to stay the plaintiffs' lawsuit for their failure to first initiate arbitration, as required under the master labor agreement. According to the court, although the plaintiffs framed their arguments as ERISA claims, their claims could not be resolved under ERISA but instead required resolution under Section 301 of the Labor Management Relations Act.
"Although the Complaint does not expressly reference the LMRA, Plaintiffs' claims--whether for breach of fiduciary duty or violation of ERISA's prohibited transaction provisions--turn on a threshold contractual determination, namely whether UPS owes contributions at a specified rate under the CBA. The LMRA requires that this threshold determination be resolved pursuant to the grievance and arbitration procedures contained in the CBA," the court said.
The plaintiffs were represented by Robert A. Fagella of Zazzali, Fagella, Nowak, Kleinbaum & Friedman, Newark, N.J. Jody S. Riger of Proskauer Rose, Newark, N.J., represented UPS.
The full text of the opinion is at https://d3n8a8pro7vhmx.cloudfront.net/teamstersforademocraticunion/pages/6158/attachments/original/1434125644/06cv5331.pdf?1434125644.
UPS Deal Won't Create 10,000 New Full-Time Jobs
Click here to visit MakeUPSDeliver.org for the latest contract info.
Bloomberg: Teamsters Ink Deal with UPS
October 1, 2007: United Parcel Service Inc.'s five-year tentative contract agreement with the Teamsters will allow it to pay $6.1 billion to gain greater control of some pensions and will provide pay and benefit increases for workers.
Wall Street Journal: UPS, Teamsters Near Pension Deal
September 29, 2007: United Parcel Service Inc. and the Teamsters union are closing in on a labor agreement that would restructure and possibly lower the company's pension obligations.
The two sides are trying this weekend to finish hammering out a deal in which the Atlanta package-delivery giant would pull out of the Central States Pension Fund, the largest multiemployer program in the trucking industry.
October 1: They'll Be Done
Our right to vote on the tentative agreement gives us the power to stop Hoffa from settling short again. We can send them back to the bargaining table if the deal falls short.
The National Negotiating Committee has vowed they will cut off negotiations if an agreement is not reached on Monday, saying "October 1 or We're Done."
With no contract campaign or membership mobilization, Hoffa and Hall have bet all of their chips on reaching an early deal with the company.
After a tentative agreement is reached, the International Union will call a meeting of the "Two-Person Committee" consisting of two representatives from each local with UPS Teamsters. Then there will be local union meetings where officials explain it (and many give a sales job) and members can discuss it. The tentative agreement will then be put to a vote of the members in a mail ballot.
Teamsters at UPS will have at least two votes: one vote on the National Agreement and one on the Supplement (a local or regional agreement). In some cases, members will even get a third vote on a local Rider.
In 2002, Hoffa sold us the "Best Contract Ever." This time, UPS Teamsters need to scrutinize the settlement carefully before voting.
Make UPS Deliver Will Get You the Facts
Make UPS Deliver will get the facts out so that Teamsters at UPS can make an informed decision.
- Make UPS Deliver will publish a contract analysis on contract highlights and lowlights.
- The Make UPS Deliver network will also be holding a series of conference calls and rank-and-file meetings to bring members together to go over the agreement.
UPS is making record profits. Their offer will be the richest contract offer ever. We need to look beyond the dollar signs to make sure that the contract protects our pensions and benefits for the long term—and provides new contract protections that will improve life for Teamsters in every job classification.
UPS is hungry for an early deal. Our right to vote gives us the power to send the company and the union back to the table if they negotiate another substandard contract.
Make sure you are informed about the details of any new deal. And help spread the word to other Teamsters at UPS so they too can cast an informed vote.
Click here if you want to be contacted to participate in a conference call to go over the details of the new agreement.
Click here if you can help distribute copies of a Contract Highlights and Lowlights to UPS Teamsters.
Read the Wall Street Journal article "UPS, Teamsters Near Pension Deal."
UPS Wants Control to Keep Lid on Our Pensions
The record shows that UPS will use its greater control to keep a lid on benefits and push for pension cuts. That's just what UPS has done in two major Teamster pension funds consisting only of UPS Teamsters: New Jersey Local 177 and New York Local 804.
- In New York, UPS's trustees pushed through a 30 percent pension cut at the start of negotiations over the opposition of every Teamster trustee. (UPS won the vote by swinging over a union trustee, a machinist official who represents UPS mechanics.) As a result, the accrual rate in Local 804 was indefinitely dropped to $100.80. That's lower than Central States, where the accrual rate is $132!
- In Jersey, UPS used its control of half the trustees to force its proposal for pension cuts before an arbitrator. If the company gets its way, the pension accrual rate will be slashed by 30 percent to approximately $104, also lower than Central States.
The accrual rate is the amount of monthly pension benefit that you earn or "accrue" for a year of service.
Both the Local 804 and 177 funds are UPS-Teamster funds. They're run out of Atlanta. At each fund, the company names half of the trustees-and then those trustees vote in a bloc to cut Teamster benefits. This is the same structure that is being proposed to "help" Teamsters in the Central States.
Will UPS's Offer Raise Benefits?
To try to win membership approval of their Central States pension grab, UPS will offer a pension increase in their new Central States plan. Before taking the bait, members should look at the company's record and ask what it will mean for the long-term to give UPS half the votes over our pensions.
In the Central States, the accrual rate is guaranteed to go up by a minimum of 8 percent each year. Next year, the Central States accrual rate will be at $143-and in four years, it will be a minimum of $180.
What will happen in the funds where UPS controls half the trustees right now? Will UPS's contract offer provide for guaranteed annual increases in the New York and New Jersey funds? Don't count on it.
UPS has used its voting power in these funds to freeze the accrual rate, push for cuts, and keep a lid on Teamster benefits. That's why UPS is willing to shell out billions to withdraw from Central States: they plan to get it back and more in the future.
It's no surprise that UPS trustees vote in a bloc to save the company money. Knowing that, why would our union give the company more control over our pensions?
Benefits in the Central States need to be improved. There's no doubt about that. The company wants an early agreement. We need to use our leverage to win record contributions that will 1) immediately restore retiree healthcare and 2) provide a roadmap for increasing pension benefits and eliminating penalties for retiring before age 62-without giving in to the company's pension grab.
That's the way to make UPS deliver.