DC Velocity - October 2012

Round 1: Teamsters present initial contract proposal to UPS

Every five years, UPS Inc. and the Teamsters union step into the ring to negotiate the nation’s biggest collective bargaining agreement. Riding on the outcome are the livelihoods of about a quarter of a million workers and the fate of nearly 16 million parcels and letters tendered or received by 8. 8 million global customers.

The opening bell has sounded.

UPS and the Teamsters renewed their vows Sept. 27 in Washington with the Teamsters formally presenting UPS with initial proposals for two contracts. The big contract covers between 240,000 and 250,000 employees in the company’s small-package operations. The smaller one governs an additional 12,000 to 13,000 workers in its UPS Freight less-than-truckload (LTL) unit.

The launch date is unusual in that it comes about 10 months before the July 31, 2013, expiration of both five-year contracts. The two sides agreed to the early start. The Teamsters said the time was right given the tough economy and UPS’s strong financial condition. UPS declined comment.

Ken Hall, who is heading the Teamsters’ negotiating team, spent Sept. 21 in Chicago briefing a cluster of local union officials representing UPS and UPS Freight on key

contract issues. In a Sept. 24 post on the union’s website, the Teamsters said the “UPS and UPS Freight proposals were unanimously approved” by the local unions. The Teamsters would not comment beyond that.

In a document posted on its website, Teamsters for a Democrat Union (TDU), a dissident group often at odds with the union establishment led by longtime General President James P. Hoffa, said Hall told the locals he would keep union demands modest at UPS Freight because the unit had not been profitable.

BIG FOCUS ON SMALL PACKAGES

Most of the attention, however, will be focused on the small-package bargaining. According to TDU, the union’s proposals include increases in pension payments, including hikes for the 48,000 full-time UPS workers that in 2007 were transferred from the Teamsters’ Central States multi-employer pension plan to one that is jointly administered by UPS and the union.

According to TDU, the Teamsters proposal also calls for wage increases, especially in starting pay for part-timers. All part-time workers, other than sorters and pre-loaders, start at $8.50 an hour.

Another objective, according to TDU, is to force UPS to honor its commitment to convert thousands of part-time Teamsters jobs to full-time positions. A provision of the 2007 contract requires UPS to offer part-timers the chance to fill at least 20,000 full-time operational jobs during the life of the contract. Six of every seven available full-time jobs would have to be staffed by former part-timers, according to the contract.

Ken Paff, TDU’s veteran chief organizer and one of Hoffa’s fiercest critics, said UPS has not lived up to its end of the bargain over the past five years, and union leadership hasn’t held the company’s feet to the fire.

‘SUREPOST’ COULD BE A FACTOR

TDU indicated that Hall wants UPS to propose language to protect Teamsters jobs threatened by the growth of the company’s delivery relationship with the U.S. Postal Service (USPS), in return for the “union’s continued cooperation” with the program, known as UPS SurePost.

Under SurePost, UPS tenders parcels to the USPS, which then takes the shipments the so-called “last mile” from the local post office to destination. The program, tailored to e-commerce shipments from online merchants to residences, is inexpensive for shippers. In many cases, it gives e-merchants the latitude to offer free shipping to their customers, a feature that often cements an online sale. UPS rivals FedEx Corp. and DHL Express have similar relationships with USPS.