Although UPS package handlers rejected a contract proposal that would cover about 240,000 workers, national leaders of the Teamsters union said its constitution requires them to ratify the agreement, causing some confusion, disagreement and anger among members nationwide, including Local 89 in Louisville.
One local union member told Insider that he worried a forced ratification would have far-reaching consequences and could undermine the union’s long-term viability in so-called right-to-work states, including Kentucky.
The turmoil is occurring as the logistics giant is gearing up for its busiest season, and it is coinciding with related labor troubles: Other Teamsters divisions, including aircraft mechanics, also recently rejected contract proposals.
The International Brotherhood of Teamsters (IBT) said in a statement Friday that 54.2 percent of package handlers cast ballots against the proposal. However, it said union rules require that the proposal must be ratified if less than half of eligible voters cast ballots and less than two-thirds of voters reject it. Only 44.3 percent of the eligible 209,043 members participated.
“The International Constitution does not give the (National Negotiating Committee) an option in these circumstances,” the IBT said.
Leaders of Local 89, who opposed the national agreement, could not be reached Monday, but they and many members disagree with the IBT’s interpretation, saying that the union’s constitution allows — but does not require — IBT leaders to ratify the proposal.
The matter is complicated further by many union members also rejecting proposals negotiated by their local leaders. Local 89, for example, voted against its Louisville-specific proposal, and a union member who is part of a group that opposes the local and national union leadership said it’s likely that the local proposal, too, will be ratified despite the members’ rejection. The national agreement cannot be ratified if the local ones have not been.
UPS spokesman Mike Mangeot told Insider via email Monday that the company looks forward to implementing the national agreement “as soon as remaining local and supplemental agreements are ratified.”
“UPS is meeting with Teamster leadership to discuss the next steps,” he said.
Members concerned about raises, pensions
The national agreement would cover about 240,000 workers, including 7,000 part-time package handlers at Worldport and another 1,000 at Centennial and Bluegrass ground hubs in Louisville. UPS employs about 21,000 people total in Louisville.
The agreement calls for starting wages to jump to $13 per hour, from the current $10.50, which means any employee who earns less than $13 would immediately get a raise. And, UPS said, existing part-time workers also would get raises of $4.15 over the five-year life of the contract.
The deal would require UPS to create 5,000 full-time jobs over five years and to review with the union any proposed technological changes, such as drones and driverless vehicles.
Fred Zuckerman, president of Local 89, has told Insider that the starting wage of $13 is still at least $2 too low and assures that UPS will continue to lose workers to other local employers who pay more. He made the comments before Amazon said last week that it would institute a $15 minimum hourly pay for its U.S. employees.
Zuckerman also has said that the union has made major concessions on health care benefits over the last few years.
“Quite frankly,” he said, “we want some of that stuff back.”
James Anderson, a Louisville-based UPS package handler, told Insider Monday that he rejected national and local agreements over concerns, including low wages and pensions.
“I felt that there wasn’t enough financial compensation” in the national proposal, he said.
For one, Anderson stated, current workers would see much smaller raises than new hires.
Many new hires are currently paid $10.50 per hour but get weekly bonuses of $150 to $250 depending on their start date. When they enter their second year, they get a raise of 50 cents per hour, but they lose all the bonus pay, which means a newly hired colleague would be earning thousands of dollars more than a worker who has been with the company for a year.
Bonuses should be paid to all workers — or none, said Anderson, who pointed to UPS’ contract structure as a cause for high employee turnover.
He also said that for pension compensation, UPS does not give credit to workers for the years during which they worked part-time. Thirteen of Anderson’s 31 years with UPS were part-time, which means he would have to work 43 years to reach 30 years and full pension benefits, he added. Many members have to work even longer, which means they probably won’t be able to put in 30 years and will lose a substantial portion of their potential pension.
Some Louisville union members have sharply criticized both the Teamsters local and national leadership teams.
Anthony Blair, of Louisville, posted on Facebook that local workers “have been disgusted with the negotiations and the contract vote.”
When Blair told members of the Hourly Workers Unite Facebook group that the local proposal also had been ratified, some Teamsters members reacted with confusion and anger.
“Unbelievable,” wrote Terry Abell, of Louisville.
Cary Lockard, a package handler from Jeffersontown, posted he was “beyond (angry) that they just shoved this contract down our throats.”
Both Anderson and Zuckerman said the company can afford to share a little more of its wealth. UPS has generated more than $16.2 billion in net profit in the last four years, and the recent corporate income tax cut will boost the company’s profits by another $1 billion annually.
The company reported second-quarter income of $1.5 billion, up 7.3 percent. Its quarterly dividend, at 91 cents per share, is up 36 percent from four years ago.
UPS said previously that the proposal rewards employees “for their contributions to its success while enabling the business to remain flexible to meet its customers’ needs.”
Contract wrangling also is being tainted by political infighting.
Zuckerman and a Boston-based ally hope to supplant the IBT leadership, including President James P. Hoffa, in the 2021 elections and have been urging their members to reject the national agreement. And Anderson is part of a Local 89 splinter group that hopes to oust Zuckerman that same year.
Anderson told Insider that the Local 89 splinter group is starting a campaign to urge its members to call the IBT to pressure national leaders to change their minds about ratification and instead continue negotiations.
The IBT and Denis Taylor, one of Hoffa’s negotiators, could not be reached.
Anderson said that he worries about broader implications if the IBT ratified the proposal against the wishes of its members.
It would weaken the union, Anderson said, especially in a right-to-work state such as Kentucky.
Right-to-work laws bar agreements between employers and unions from making the payment of union dues a condition for employment. Opponents say such laws give workers a choice in whether they want to pay union dues, while opponents say it undermines unions and lowers wages.
If union leaders implement an agreement that the workers have rejected, Anderson said, the members might ask themselves why they should continue to pay dues to an organization that does not listen to them.
“This is not the time that the union can afford to go against the will of the members,” he said.
In the Facebook group, some members already threatened to leave the organization, though a fellow member warned that leaving would weaken the union and strengthen the company’s hand in future negotiations.
“I don’t really care if it’s the answer or not,” wrote UPS marshaller Greg Shepherd. “I refuse to pay the salaries of people who are playing for the other team thru my union dues!”