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Part-time employees, which represent a significant portion of UPS’s workforce, will receive the largest relative pay increases. The deal also eliminated a tiered wage system that paid newer part-time employees less.
UPS also agreed to install air conditioning in all of its new package delivery vehicles and eliminate a practice that allowed management to force drivers to work on scheduled days off.
“This is a very, very strong contract, and it’s clear they wouldn’t have won it without being completely ready, willing and able to strike,” said Rebecca Givan, an associate professor of labor studies at Rutgers University.
The company cut its revenue forecast earlier this month largely to reflect new costs under the labor agreement, executives said.
Negotiators announced the tentative agreement on July 25, averting a strike that would have seen more than 300,000 Teamsters members walk off the job on Aug. 1.
The Teamsters, led by General President Sean M. O’Brien, had spent close to a year readying for a strike, staging “practice pickets” and preparing members for the financial hardship that could have come from walking off the job.
“Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package delivery industry,” O’Brien said in a statement Tuesday. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention.”
The union vote took place over several weeks. The deal met vocal internal opposition from some union members who hoped O’Brien would drive a harder line during negotiations — and from workers determined to strike.
When the Teamsters walked off UPS workroom floors for 15 days in 1997, the company cut its stock value by $285 million. Company leaders, chastened by the work stoppage that took decades to recover from, vowed to never again repeat the episode, giving the union surpassing leverage in negotiations.
Greg Kerwood, a parcel delivery driver and union steward in Somerville, Mass., called the agreement “unquestionably the best contract we’ve ever seen.” Yet he said he voted against the deal, citing shortcomings on vacation time and sick days.
“My concern is that I’m not sure it’s the right contract for 2023, given the concerns of the membership and the leverage that we had,” Kerwood said.
More than 150,000 of UPS’s unionized employees are part-timers who work in warehouses sorting parcels and loading them on trucks. The contract raises the base wage for those workers to $21 an hour, a nearly $5 hourly raise, but short of the $25 hourly demand a vocal group of part-time employees had raised.
The group also wanted transparency around location-based pay incentives UPS offered to part-timers and “longevity increases,” or retention raises, for part-timers with fewer than five years of employment.
“For me, it’s about fairness,” said Jennifer Hancock, a part-timer of 32 years in Richmond and a member of an internal Teamsters advocacy group urging a “no” vote. “I cannot vote yes on a contract that is going to be paying the people coming behind me substantially less.”
Damian Kungle, who works part-time in Canton, Ohio, for $16.65 an hour, and Amber Mathwig, who does similar work for $24 outside Minneapolis, said they had hoped O’Brien would have forced a strike.
“I think a two- or three-day strike would be good for UPS,” Mathwig said. “It’d be a nice little check. You want your billions of dollars for shareholders, you need to take care of us.”
The company, which reported $1.6 billion in operating profits in the quarter ending July 31, delivers 6 to 8 percent of the U.S. gross domestic product and is a key cog in the consumer and small-business logistics markets.
O’Brien had positioned the Teamsters’ contract drive as a signal to other labor groups to take more militant stands at the bargaining table, and he hoped to send a stronger message to Amazon workers.
(Amazon founder Jeff Bezos owns The Washington Post. Patty Stonesifer, interim chief executive of The Post, sits on Amazon’s board.)
After one Amazon fulfillment center organized with the independent Amazon Labor Union in 2022, the labor movement swarmed to support organizing drives at other facilities.
That momentum slowed after the union lost an organizing election at another facility. But O’Brien, a brash, fourth-generation Teamster from Boston, has fashioned himself as a political foil to Bezos and Amazon chief executive Andy Jassy. He has signaled his union’s desire to use a successful UPS negotiation as a springboard to potentially organize Amazon employees.
Unions that score victories at other companies have a better chance of organizing workers at nonunion employers, Rutgers’s Givan said.
“Every time you win a strong contract,” Givan said, “you give new organizing a boost because you demonstrate to workers that are thinking about organizing, what difference that strong contract can make.”
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