Teamsters Score Big with UPS, Setting Stage for Labor Triumphs at Amazon and Big Three

In a surprising turn of events, negotiations between the International Brotherhood of Teamsters and United Parcel Service Inc. (UPS) came to a halt on July 5.

However, amidst the unresolved labor situation, the Teamsters managed to secure significant victories that have the potential to reshape the trucking industry.

These victories also pave the way for organized labor to gain a stronger foothold at companies like Amazon.com Inc. and other delivery firms that rely heavily on contractors.

Elimination of Two-Tier Wage System and Air Conditioning for Delivery Trucks

One of the notable achievements of the Teamsters is the elimination of the two-tier wage system at UPS, which the union argued unfairly disadvantaged part-time drivers who also performed warehouse work.

Additionally, UPS agreed to equip their delivery trucks with air conditioning for the first time. Due to the nature of collective bargaining, these agreements are unlikely to be revisited, even in the event of a strike.

Regaining Lost Ground and Future Victories

While wage disparities and other economic issues continue to divide the company and the union, the Teamsters have proven that it is possible to regain lost ground and set the stage for similar victories.

This success is crucial for labor unions as they face the challenges of automation and declining membership.

Seth Harris, the former top labor adviser to President Joe Biden, believes that the Teamsters’ achievements, along with other unions’ successes at the bargaining table, send a clear message to workers: unions are worth it, and the risks of organizing with coworkers are worthwhile.

Leveraging Success for Amazon Workers

Teamsters President Sean O’Brien has long planned to leverage these successes to benefit Amazon workers. The union intends to deploy part-time employees from UPS and DHL to engage in one-on-one conversations with Amazon workers, using the strong contracts negotiated with similar industries as a marketing tool to demonstrate the advantages of working under a union contract.

O’Brien expressed confidence in the negotiations, stating, “They know what we want, they know what we need, they know what we deserve.” Although there are still economic issues to be resolved, the progress made in other areas can have a positive spillover effect on additional companies.

Influence on Other Labor Negotiations

Looking ahead, the Teamsters’ triumphs could influence the negotiations between the United Auto Workers (UAW) and Detroit’s Big Three automakers, whose master contract expires in September. UAW President Shawn Fain, like O’Brien, ran on a platform of taking a tougher stance with employers and has insisted on the complete abolition of tiered wages. Now, UAW members have evidence that such demands can be met.

Challenges and Potential for Change

The implementation of tiered wages, originally introduced to protect jobs during recessions, has perpetuated wage discrepancies among employees performing the same tasks. General Motors Co. and the UAW introduced a two-tier system in 2007, but after an unprecedented six-week strike, the two sides agreed to a pathway to full-time status for part-time workers. However, Fain believes that the company can provide an even better deal.

Undoubtedly, the fights ahead will not be easy. The national union rate hit a record low of 10.1% last year, with only 6% of the private sector being unionized. However, the transportation and warehousing sector boasts one of the highest unionization rates in the private sector at 14.5%, indicating a potentially stronger interest among workers in this industry.

Adapting to New Business Models

The Teamsters are simultaneously engaged in a battle with Amazon in California, highlighting the stark differences between the two companies. A group of 84 Amazon drivers, who were employed by a contractor, filed a complaint with the federal labor board after forming a union in April, only to discover that Amazon had severed ties with the contractor just ten days prior. These drivers have been picketing Amazon in California since June 24 and have held demonstrations in other states as well.

To be effective, the Teamsters will need to adapt their strategies to accommodate business models like those employed by Amazon and FedEx, which heavily rely on complex networks of contractors and subcontractors. Nevertheless, these efforts have the potential to improve the quality of low-paying jobs that have eroded the US supply chain for a considerable period.

The last time the Teamsters went on strike against UPS was in 1997, resulting in a 15-day shutdown that cost the company over $600 million. The strike ultimately led to the conversion of 10,000 part-time positions to full-time in exchange for the union’s agreement to a five-year contract. Since then, the number of Teamsters-represented UPS workers has more than doubled, and full-time delivery drivers now earn an average of $95,000 per year, while part-time workers earn significantly less.

UPS Negotiations and Broader Implications

The outcome of the UPS negotiations will undoubtedly attract the attention of Amazon workers, who will closely scrutinize any wage increases. Although Amazon’s flexible and part-time delivery work model differs greatly from that of UPS, the voices advocating for unionization are likely to grow louder.

The UPS battle coincides with several high-profile union campaigns at companies like Starbucks, REI, and Trader Joe’s, which could also generate increased interest among workers. The transportation sector, in particular, has been restless in the wake of the Covid-19 pandemic, with Congress intervening to prevent a nationwide rail strike and ongoing high-stakes talks concerning West Coast ports.

Historically, unions have built on each other’s successes, making incremental gains during negotiations with employers. By being transparent about their negotiations and steps taken, the Teamsters have provided valuable insight for smaller unions as they contemplate their own settlement negotiations.

The UAW has already laid the groundwork by pressuring John Deere to eliminate their two-tier wage system following a month-long strike in 2021. Now, they seek to replicate the Teamsters’ success on a larger scale before their agreement expires in September.

In conclusion, while the labor battles ahead will undoubtedly present challenges, the achievements of the Teamsters at UPS have reinvigorated the labor movement. The victories provide a strong foundation for future negotiations and offer hope for improved working conditions and fairer wages across industries. As the fight for workers’ rights gains momentum, the Teamsters’ triumphs will resonate far beyond their own ranks, potentially transforming the landscape for employees at Amazon, the Big Three automakers, and beyond.

Source:  Bloomberglaw.com