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Teamster Locals' 'No' Votes Throw Wrench Into UPS' Contract Implementation


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UPS Inc. (NYSE: UPS) employees at several Teamsters union locals have soundly rejected their respective riders and supplements to a five-year collective bargaining agreement which was ratified in October despite the majority of voters rejecting the contract.

The actions by the locals means that the contract, which was to be implemented retroactive to July 31, 2018, will not go into effect for an undetermined period. Under rules governing the UPS-Teamsters contractual relationship, the master contract cannot be implemented until all locals ratify their respective supplements and riders.

The rejections also set the stage for Teamster leadership to impose the contract on all locals if the side agreements are not ratified at the various locals. The international union took such a step in 2014 after several locals voted to reject their supplements, delaying the implementation process for months beyond the ratification date the year before.

The locals rejecting their supplements were in Detroit at Local 243, and in western and central Pennsylvania. The margins were overwhelmingly decisive in Detroit (88 percent) and western Pennsylvania (96 percent), with a narrower margin (56.3-43.7 percent) in central Pennsylvania. This marks the second time in this contract cycle that the locals had voted down their supplements and riders.

According to the Teamsters for a Democratic Union (TDU), a dissident group, Teamsters' leadership forced contract votes in Detroit and western Pennsylvania even though local officers told the international union they were still negotiating with UPS. According to TDU, leadership also made a major strategic error by excluding Local 776 in Harrisburg, Pennsylvania, which represents 1,900 UPS Teamsters, from the negotiating committee. Excluding the local, which has more UPS employees than all the locals in the central Pennsylvania group combined, hardly fostered unity among the rank-and-file, according to TDU, which is nearly always at odds with mainstream Teamsters leadership. Teamsters officials were unavailable for comment.

Ken Paff, national organizer for TDU, said today that the wide margin of rejections in Detroit and western Pennsylvania would make it virtually impossible for the leadership to demand another vote. Paff and others have called on the leadership to demand that the contract be reopened for further negotiations.

The master contract was ratified in spite of 54 percent of voting Teamsters rejecting it. Under a "two-thirds" provision in the UPS-Teamsters contract rules, a contract is ratified if less than 50 percent of eligible voters cast ballots, unless at least two-thirds of those who voted rejected it. About 44 percent of about 209,000 eligible UPS Teamsters voted, and the final tally fell well short of the two-thirds rejection threshold needed for a re-vote.

At the time of the vote, Dennis Taylor, the Teamsters' lead small-parcel negotiator, said he would push UPS for modifications to the contract. However, Taylor said he was prohibited by the rules to reopen negotiations with the Teamsters' largest employer. Various Teamsters leaders disputed that argument, contending that Taylor was within his right to reopen negotiations if it was deemed to be in the best interests of the rank-and-file. According to Paff, there has been no effort by Taylor or anyone else in the Teamster hierarchy to renegotiate the contract.

The contract's most controversial provision establishes a two-tier wage structure for full-time drivers. Drivers with less seniority would make $6 an hour less than their senior counterparts. Drivers with less seniority would also work hours other than the regular Monday through Friday work week reserved for drivers with more seniority.

The language was a nod to the 24-7 fulfillment demands being placed on businesses by e-commerce customers. It was also a reaction to the seven-day per week delivery service offered by Amazon.com, Inc. (NASDAQ: AMZN) through its own delivery network and in conjunction with the U.S. Postal Service. UPS has never operated on Sunday.

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