UPS and Teamsters avoid historic strike with tentative contract

UPS and the Teamsters reached a tentative deal Tuesday that helps the company avoid a massive strike by the 340,000-person union that threatened to damage the U.S. economy.

The agreement includes a $2.75 wage increase per hour for full- and part-time employees this year and a boost next year of  $7.50 per hour over the length of the new contract. The pact is for five years. Part-time workers, who are often paid much less than full-time employees, will immediately have their wages increase to at least $21 an hour.

The deal also adds Martin Luther King Day to the list of paid holidays off and ends forced overtime on scheduled days off.

In a significant victory for the union, the new deal ends the two-tiered classification for drivers, providing part-timers the same privileges as full-timers.

“This agreement continues to reward UPS’ full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” UPS CEO Carol Tome said in a statement.

Union officials declared victory shortly after the deal was announced.

“We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers,” Teamsters President Sean O’Brien said in a statement.

The contract for UPS’ unionized drivers was set to expire July 31, meaning that about 340,000 workers were set to walk off the job Aug. 1. The tentative agreement narrowly avoids that strike and lets UPS customers and business owners breathe a sigh of relief. 

Teamsters members must approve the new agreement through a vote scheduled from Aug. 3-22.

Contract negotiations were often strained. In the lead-up to the tentative agreement, both sides accused the other of not negotiating in good faith. A strike seemed inevitable last week when Mr. O’Brien asked President Biden to not intervene if the union walked out.

UPS ships about 24 million a day, about 25% of all U.S. parcels, according to Pitney Bowes. UPS says that is the equivalent of about 6% of nation’s gross domestic product.

UPS has the largest private-sector contract with workers in North America. The last breakdown in labor talks a quarter century ago led to a 15-day walkout by 185,000 workers that crippled the company.

• This article is based in part on wire-service reports.