Teamsters at UPS Ratify Historic $30 Billion Contract

The agreement passed by the highest margin ever for a Teamster UPS contract.

By Jordan Zakarin, More Perfect Union

Teamsters members who work at UPS have voted to approve a historic contract with the shipping conglomerate, the union announced on Tuesday. The contract, which covers five years and expires in 2028, passed with 86.4% of the vote. A record 58% of the union’s 340,000 eligible members voted after months of strike threats, charged rhetoric, and hard negotiations. 

The new master agreement calls for raises of $7.50 per hour over five years for both full and part-time members. UPS. Full-time delivery drivers will earn $49 by the end of the contract. Part-time workers, who make up a majority of the Teamsters’ membership at UPS, will make a minimum of $21 per hour upon ratification, a significant increase from the current $16.25 starting rate in most circumstances. By the end of the contract, some part-timers will be making at least $25.75.

Local wage adjustments, known as Market Rate Adjustments, as well as other regional-specific clauses, were negotiated separately in 45 supplementary agreements. According to the union, 44 of the 45 supplementary agreements were also approved by local members. Some include higher pay rates based on the local labor market.

The contract was hammered out in a series of negotiations that began in April in Washington, DC. Mass dissatisfaction with the Teamsters’ last contract with UPS, agreed to by former union president James P. Hoffa even after members voted it down, helped fuel a successful dissident campaign by former Hoffa ally Sean O’Brien. He was elected in 2022 on the promise that he'd lead a tough and uncompromising negotiation with UPS leadership over a new contract. 

O’Brien mixed politics and pugilism in the lead-up to negotiations, which began in April. With a fired-up membership and UPS flush with cash after making record profits in 2022, O’Brien promised early on that the Teamsters would launch one of the largest strikes in United States history if they could not reach a satisfactory agreement. 

The Teamsters’ list of demands was not insignificant, as the union had to dig out of the hole created by the 2018 agreement. One of the primary demands was the end of the two-tier classification system that allowed the company to pay some full-time drivers significantly less than others. UPS agreed to drop that provision and hire for the 22,000 jobs that currently sit unfilled. 

Starting next year, every UPS truck will be equipped with air conditioning, which was another priority of the union after workers spent the past two summers sweltering and falling ill while making deliveries in record heat. As AC is added to trucks, the driver-facing cameras that UPS had used to monitor workers’ every single movement will be removed as part of the agreement.

For part-time workers, the victory is both significant and somewhat bittersweet. The raises, while substantial, were less impressive to long-time workers, many of whom campaigned for a $25 per hour starting salary right out of the gate. The company did agree to hire at least 7,000 more full-time employees, opening up a pathway that had been blocked for the part-timers who do the backbreaking work in the shipping hubs. O’Brien won his election with the support of part-timers, who had historically been largely ignored by the union leadership despite being the largest segment of the membership.

The contract, seen largely as a victory for the union, allows UPS to avert what would have been a very costly strike both for the company and a nation that relies on e-commerce and shipping more than ever. The Teamsters will also save a significant amount of money, which can now be put towards O’Brien’s most ambitious initiative: organizing Amazon. 

The nation’s next major contract battle is currently taking place between the UAW and the Big Three automakers of Ford, General Motors, and Stellantis. The UAW is also led by an aggressive new president, Shawn Fain, who will cite the wins achieved by the Teamsters in the negotiations. 

Fain has already highlighted the Teamsters’ success in lowering their two-tier pay structure; the UAW agreed to the scheme during the Great Recession when the automakers were facing extinction. It has since lowered the average wage of workers as older ones retired and new employees were recruited.