UPS Employees Union Votes to Override 3 Local Bargaining Units -- Update

By Laura Stevens 

The national union representing United Parcel Service Inc. employees voted Wednesday to override three local bargaining units that were holding out on approving parts of a five-year national contract with the delivery company.

The bold and unusual move, described in an internal memo viewed by The Wall Street Journal, took local union leaders by surprise. In the memo, the International Brotherhood of Teamsters said that the UPS national negotiating committee "voted overwhelmingly" to declare the new contract in effect.

This decision supersedes prior rejections by three locals of parts of the national contract, known as riders or supplements, that address issues such as wages for part-time employees, pension contributions and overtime restrictions.

"UPS has not been officially notified by the International Brotherhood of Teamsters on this issue. We are not able to comment further," a spokesman for UPS said.

UPS has been working to implement a five-year master contract that was approved in June by a majority of the Atlanta-based company's domestic package-delivery employees. However, the contract wasn't supposed to go into effect until local unions resolved all outstanding supplements and riders.

In the memo, the national committee said it had the authority to implement the contract if locals were rejecting it on the basis of language that had already been approved. Its memo claimed that the three locals that had continued to reject their riders and supplements had been doing so based on changes to the employees' health-care benefits--something that had already been decided in the national contract.

"Ninety-five percent of our UPS members have already voted to approve their agreements, and UPS currently owes Teamster members and our funds more than $300 million in wages and contributions," the national negotiating committee said in the memo. UPS has agreed to expedite these payments, it added.

The agreement becomes effective Friday, and changes to health care will happen on June 1.

UPS reports quarterly earnings on Thursday.

Last week, Teamsters Local 89--which represents some 8,000 UPS employees at the company's air hub in Louisville, Ky.--overwhelmingly voted down its rider for the second time. A third rejection might have authorized the employees to strike, according to the president of the local, Fred Zuckerman. The decision took him by surprise. He said the local would try to determine if it could contest the decision.

The Louisville local was pressing UPS to take measures to help workers get from the parking lot to their areas of work at the Worldport air hub more quickly, including deploying more shuttles and metal detectors, Mr. Zuckerman said. He also said his local's latest rejection of the contract had been prompted by the company's removal of a pension-contribution increase for some workers.

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