UPS Contract Talks Go Down to the Wire as a Possible Strike Looms

on Jul23
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Barely a week before the contract for more than 325,000 United Parcel Service workers expires, union and company negotiators have yet to reach an agreement to avert a strike that could knock the American economy off stride.

UPS and the union, the International Brotherhood of Teamsters, have resolved a variety of thorny issues, including heat safety and forced overtime. But they remain stalemated on pay for part-time workers, who account for more than half the union’s workers at UPS.

A strike, which could come as soon as Aug. 1, could have significant consequences for the company, the e-commerce industry and the supply chain.

UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States, according to the Pitney Bowes Parcel Shipping Index. Experts have said competitors lack the scale to seamlessly replace that lost capacity.

The Teamsters have cited the risks its members took to help generate the company’s strong pandemic-era performance as a reason that they deserve large raises. UPS’s adjusted net income rose more than 70 percent between 2019 and last year, to over $11 billion.

The contract talks broke down on July 5 in vituperation. The two sides are to resume negotiations in the coming days, but the window for an agreement before the current five-year contract expires is tight.

In a Facebook post this month, the union said the company’s latest offer would have “left behind” many part-timers, whose jobs include sorting packages and loading trucks. The post said part-timers earned “near-minimum wage in many parts of the country.”

UPS, which says it relies heavily on part-timers to navigate bursts of activity over the course of a day and to ramp up its work force during busier months, said it had proposed significant wage increases before the talks broke down. According to the company, part-timers currently earn about $20 an hour on average after 30 days as well as paid time off, health care and pension benefits. The company noted that many part-timers graduated to jobs as full-time drivers, which pay $42 an hour on average after four years.

The union has gone out of its way to highlight the challenges facing part-time workers. In television interviews and at rallies, the Teamsters president, Sean O’Brien, has emphasized what the union calls “part-time poverty” jobs. He has frequently been joined by leaders of other unions and politicians, including Representative Alexandria Ocasio-Cortez, the New York Democrat.

Less than two weeks later, the union said that it was walking away from the table over an “appalling counterproposal” from the company on raises and cost-of-living adjustments and that a strike “now appears inevitable.”

The two sides resumed their discussions the week before the Fourth of July and soon resolved what was arguably their most contentious issue: a class of worker created under the existing contract.

UPS said the arrangement was intended to allow workers to take on dual roles, like sorting packages some days and driving on other days — especially Saturdays — to keep up with growing demand for weekend delivery.

But the Teamsters said that the hybrid idea hadn’t come to pass, and that in practice the new category of workers drove full time Tuesday through Saturday, only for less pay than other drivers. (The company said some employees did work under the hybrid arrangement.)

Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the ramp-up to the current contract fight had lagged in some parts of the country, where more conservative local officials are less enthusiastic, Mr. O’Brien had no serious opposition within the union.

“Not everybody is a fan of O’Brien, but they’re not actively organizing to undermine him the way people were with Ron Carey in the ’90s,” Dr. Eidlin said. “It’s a huge, huge difference.”

Still, for all his pugilistic statements, Mr. O’Brien remains an establishment figure who appears to prefer reaching a deal to going on strike, and he has subtly acted to make one less likely.

Earlier in the negotiations, Mr. O’Brien had said that UPS employees wouldn’t work beyond Aug. 1 without a ratified contract, and that the two sides needed to reach a deal by July 5 to give members a chance to approve it in time. But last weekend he said UPS employees would continue working on Aug. 1 as long as the two sides had reached a tentative deal.

“This isn’t a shift,” a Teamsters spokeswoman said Friday by email. “This is how you get a contract. Our pressure and deadline on UPS forced them to move in ways they hadn’t before.”

Niraj Chokshi contributed reporting.

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