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Teamsters Announces “Historic” Agreement With UPS, Likely Averting Strike

The agreement would raise wages for UPS employees across the board and end a controversial two-tiered employee system.

UPS workers hold placards at a rally held by the Teamsters Union on July 19, 2023, in Los Angeles, California, ahead of an August 1st deadline for an agreement on a labor contract deal and to avert a strike that could lead to billions of dollars in economic losses.

The Teamsters have reached a new agreement with UPS that the union is touting as the “most historic” deal in the history of the company, likely avoiding a 340,000-worker strike that was slated to start August 1.

The union and the company announced the deal on Tuesday, just hours after the parties had returned to the bargaining table following a collapse in negotiations earlier this month. The agreement includes an end to the two-tiered employee system that allowed the company to pay part-time and newer workers lower wages, as well as agreements to install air conditioning in delivery vehicles and wage raises across the board, according to the Teamsters.

“We demanded the best contract in the history of UPS, and we got it,” Teamsters President Sean O’Brien said in a statement.

“We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers,” O’Brien continued, adding that UPS agreed to put $30 billion of new funds on the table to reach the new deal.

UPS CEO Carol Tomé called the deal a “win-win-win” in a statement, with the company estimated to lose $810 million from a 10-day strike and potentially a large number of customers, which happened during UPS workers’ last strike in 1997. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” Tomé said.

The agreement will give existing workers a raise of $2.75 an hour this year and $7.50 an hour over the next five years. Part time workers’ pay — who the union has previously said make near-minimum wage in many parts of the country — will be raised to a base level of $21 an hour immediately, up from the current minimum of $16.20 an hour. The new wage is lower than Teamsters’ demand of $25 an hour for part-timers, though the union touts that existing part-time workers will see an average wage increase of 48 percent over the course of the contract.

Crucially, Teamster members who were in the second tier of workers, nicknamed 22.4, will all be reclassified as senior workers. Part-time workers’ pay and the two-tier system had been major sticking points for the union.

Drivers will no longer be forced to work overtime on their days off, while the company will create 7,500 more full-time jobs and fulfill 22,5000 open positions in order to allow more part-time employees to become full-time workers. Workers have also won air conditioning in delivery vans for the first time.

The contract still needs to be agreed upon by the rank-and-file members in order to be finalized. Union leaders will be meeting at the end of the month to review the contract, after which members will get a chance to vote electronically between August 3 and August 22. If members don’t vote to ratify the contract, they may still strike.

The agreement represents a major bellwether of the resurgent labor movement, which is seeing an increased amount of strike activity and new energy for unionization. Labor leaders have continually emphasized the importance of their fight not just for the workers they represent, but for workers across the country.