UPS Teamsters authorize overwhelming strike if no deal reached by August 1st

New York
CNN
—

Members of the Teamsters union voted overwhelmingly to authorize a strike at United Parcel Service in a vote announced Friday. But a strike is still more than seven weeks away, if it happens at all.

The members of the country̵[ads1]7;s largest delivery service voted 97% to authorize the start of a strike on 1 August, if there is no agreement in contract talks which are now underway between the company and the union. The Teamsters represent more than 340,000 UPS logistics warehouse workers and package delivery drivers nationwide.

“This vote shows that hundreds of thousands of Teamsters are united and determined to get the best contract in our history at UPS. If this multi-billion dollar company fails to deliver on the contract that our hardworking members deserve, UPS will beat itself. The strongest influence members ours has is their work, and they are prepared to withhold it to ensure that UPS acts accordingly, said Sean M. O’Brien, Teamsters general president.

The results were no surprise. Strike votes are a common part of labor negotiations, designed to give union negotiators leverage as they try to reach an agreement. They usually always pass overwhelmingly. Despite that, the majority of contract negotiations end without a strike.

UPS said it remains confident there won’t be a strike this time.

“The results do not mean that a strike is imminent and do not affect our current business operations in any way,” the company said in a statement. “We continue to make progress on key issues and are confident we will reach an agreement that delivers benefits for our employees, the Teamsters, our company and our customers.”

If a strike comes, it would be the largest against a single employer in U.S. history, as UPS ( UPS ) is the largest unionized private sector employer. And it is vital to the nation’s economy, with an estimated 6% of the United States’ gross domestic product, the broadest measure of economic activity, moving aboard UPS (UPS) trucks. It delivered 18.7 million domestic parcels a day in the first three months of the year.

The current five-year contract expires on July 31, meaning a strike could start on August 1 if a new deal is not agreed before then. But there have been signs of progress at the negotiating table.

This week, the Teamsters announced they had reached a tentative agreement on one of the main issues in the negotiations, its push to add air conditioning to UPS’s fleet of 95,000 vans, the vast majority of which have only a single fan to combat heat on hot days.

The union has argued that beyond the issue of driver comfort, the lack of air conditioning is a health and safety issue for members. The union said temperatures of more than 120 degrees have been recorded in the cargo area of ​​the vans, and that workplace safety regulators have issued citations and danger letters against the company for working conditions.

At least one heat-related death of a UPS driver in Texas is being investigated by the Norwegian Labor Inspectorate.

But the preliminary agreement will require air conditioning only on future van purchases, not retrofitting existing vans. There will, however, be other retrofit measures to reduce the heat in the vans’ cargo space.

UPS said it is taking steps beyond air conditioning for vans to help drivers deal with the heat, including cooling sleeves and other heat-reducing clothing. It said safety is a priority for the company.

The union said it has reached preliminary agreements on more than 40 other issues as well, but that there is still a lot of work to be done to reach an agreement, particularly on pay.

The Teamsters have not announced what their pay increase is searching, but they points to record profits that UPS has recorded in recent years. UPS profits have nearly doubled over the five-year life of the current contract, from adjusted net income of $6.3 billion in 2018 to $11.3 billion on that basis last year. The surge in online shopping that began during the height of the pandemic led to record package delivery volumes for UPS and other delivery services.

But UPS’s profits, revenue and volumes fell in the first quarter compared with a year earlier as the company warned it was seeing signs of a slowdown in shipments.

One of the main pushes for the union is to close the gap between pay scales for different classes of employees, which allowed UPS to start regular Saturday deliveries in 2019. According to a Deutsche Bank analysis, the gap is about $6 an hour for most senior employees and less than $1 an hour for new hires. Closing the gap would cost about $140 million a year, according to the analysis, which it said is less than 0.2% of UPS’s current cost structure.

“This is an incredibly small amount for what appears to be the main issue from the Teamsters,” the Deutsche Bank analysis said.

While other union negotiations may be trying to catch up with the rising cost of living for members, the Teamsters’ current contract already includes a cost-of-living adjustment that helped boost wages at the company by 6.1%, according to Deutsche Bank.

In an effort to reassure both customers and investors, UPS CEO Carol Tome has repeatedly expressed confidence that a deal will be struck without a strike.

“While we expect to hear a lot of noise during negotiations, I am confident that a win-win-win contract is very achievable and that UPS and the Teamsters will reach [an] agreement by the end of July, Tome said in April.

But O’Brien, while acknowledging the progress that has been made, refuses to say whether he thinks a strike is likely or not.

“When you get into the meat and potatoes of wages and benefits, things can get very difficult, very controversial,” he told CNN last week. “Our aim is to get the best deal to avoid a strike. If UPS doesn’t give us what they know we need and want, they will beat themselves.”

There is also the matter of unknown anger toward UPS that could make it difficult to ratify a contract, even if an agreement is reached before the strike deadline.

A majority of members voted against ratifying the agreement in 2018, only to see the former Teamster leadership, led by then-president James P. Hoffa, put it in place anyway because not enough of the members took part in the ratification vote to trigger a strike. That contract became a major issue in the union’s presidential election last year, when the candidate Hoffa supported to succeed him lost to O’Brien.

The provision that allowed the previous contract to remain in place, despite opposition, has been removed, and a “no” vote on ratification would mean a strike this time. O’Brien said that while he is confident any deal reached will be ratified by members, he says there is pent-up anger with the company.

“There’s a lot of animosity and anger, not just over the last contract, but what happened during the pandemic,” O’Brien told CNN.

“They were not rewarded as UPS had record profits.”

CNN’s Vanessa Yurkevich contributed.