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Teamsters approve UPS contract

ATLANTA (AP) -- United Parcel Service Co. employees represented by the International Brotherhood of Teamsters have approved a nationwide five-year labor contract, but local side agreements were defeated and must be renegotiated.

A union summary of the agreement indicated that the national contract included substantial pay raises while protecting paid health insurance premiums.

The contract covers about 235,000 full-time and part-time U.S. employees at the package-delivery company including drivers, loaders and other workers. It will replace a contract that expires July 31.

The union said Wednesday that the national master contract was ratified by a vote of 34,307 to 30,202, or a 53.2 percent approval rate.

However, employees in the UPS Freight division rejected a five-year offer, 4,244 to 1,897, and 17 local supplemental agreements and riders were defeated, according to the union. In a written statement, the Teamsters blamed those defeats on a provision that would move 140,000 workers from a UPS-sponsored health insurance plan into one that would be jointly administered by the company and the union.

Critics of the proposed TEAMcare health plan said that it would provide inferior benefits and cause employees to pay higher deductibles and co-payments than they pay now under the UPS plan. The union said the change was a response to a UPS proposal to cut health benefits.

UPS said that it is committed to quickly settling unresolved issues in UPS Freight and with the supplemental agreements. The company said negotiations on side agreements were normal and that it is confident of reaching settlements.

"It will be business as usual while UPS and the (Teamsters) resolve remaining issues and Teamster-represented employees ratify new agreements," said John McDevitt, the Atlanta-based company's senior vice president of labor relations.

According to the Teamsters summary of the contract, starting pay for full-time workers will rise to $18.75 an hour from $16.10 an hour. It said that based on a 46-hour work week, the national contract will raise a full-time driver's pay by more than $25,000 over five years.

The union also said that workers will continue to receive health insurance without paying for the premiums, and premium increases for retired workers will be capped.

UPS shares rose 70 cents to close at $86.42 amid a broad market rally.