UPS is offering voluntary buyouts to its full-time U.S. drivers amounting to $1,800 per year of service, with a minimum payout of $10,000 and no cap, in the midst of a major network overhaul to boost profitability, marking a first in the company's history. The financial incentive is in additional to earned retirement benefits like pension and healthcare.
The Teamsters union, which represents more than 300,000 UPS employees, is urging members to reject the offers, calling the move an “illegal buyout offer.”
Teamsters General President Sean O’Brien said:
“Our members cannot be bought off and we will not allow them to be sold out. The Teamsters are prepared to fight UPS on every front with every available resource to shut down this illegal buyout program.”
What exactly makes these buyouts illegal? Doesn't even a unionized company like UPS have the right to downsize?
Yes, but only within the bounds of its collective bargaining agreement with the Teamsters. That’s the core of the current dispute.
The Teamsters argue the Driver Voluntary Separation Program violates the union contract because:
- It wasn’t negotiated — and any program that changes terms of employment, such as compensation and separation, must be bargained with the union.
- The buyout offers seniority order, which, while might be considered a nice addition for employees with longevity at the company, still requires union approval.
- It could be seen as UPS skirting its obligations for job security guarantees, as outlined in its 2023 contract with the Teamsters.
So while UPS has every right to downsize, the way that it went about doing so with these voluntary buyouts may conflict with their negotiated contract with the Teamsters — at least that's what the union is claiming.
The Teamsters are urging UPS drivers not to accept the buyout terms, likely because they believe they can negotiate a better deal, and also to maintain control over how these types of scenarios are handled in the future.