Shipping giant UPS and the International Brotherhood of Teamsters reached a tentative agreement on Tuesday that both sides believe could avoid a massive nationwide strike.
The five-year deal still needs to be ratified by members, but the union said its negotiating committee had “unanimously endorsed” the proposed contract, adding that it includes “overwhelmingly lucrative” raises for workers.
“We demanded the best contract in the history of UPS, and we got it,” Teamsters President Sean O’Brien said in a statement. “UPS has put $30 billion in new money on the table as a direct result of these negotiations.”
UPS called it a “win-win-win” deal in a statement.
“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive [and] serve our customers,” UPS CEO Carol Tomé said.
The current contract expires at the end of this month, and the union had said workers would walk off the job if a new deal hadn’t been reached by then. Negotiations resumed Tuesday after breaking down earlier in the month as the union demanded a better economic package for employees.
The UPS-Teamsters contract is the largest private-sector union agreement in the country, covering some 340,000 workers. Because of its size, the deal has the potential to affect working conditions at other companies that compete with UPS for workers.
A nationwide strike at the company would have vast implications for the broader economy since UPS’s competitors wouldn’t be in a position to quickly absorb its lost business.
UPS and the union had reached a number of notable accords before Tuesday. UPS had agreed to install air conditioning in all new delivery trucks starting next year, and to scrap a controversial “two-tier” compensation system that paid some drivers less than others. Both measures were priorities for the union.
But a number of sticking points remained, among them the starting pay rate for UPS’s many part-time workers. The announcement Tuesday of a tentative agreement signals that union leaders got the company to increase its economic offer to a point where they believe the broader membership will accept it.
In an outline listing the deal’s highlights, the union said full- and part-time workers would receive a raise of $2.75 per hour this year, and a total raise of $7.50 per hour over the course of five years. Part-time workers would receive a raise to at least $21 per hour “immediately.” The top rate for full-time drivers would increase to $49 per hour.
The union said the contract would also improve work-life balance for workers who didn’t want to work additional hours.
“No more forced overtime on Teamster drivers’ days off,” the union noted. “Drivers would keep one of two workweek schedules and could not be forced into overtime on scheduled off-days.”
It typically takes several days for union locals to share all the contract language and explain the finer points to members before they can cast ballots on ratification. The union said voting would start Aug. 3 and conclude Aug. 22.
If members end up rejecting the deal, they could send negotiators back to the table for a better offer.
But O’Brien seemed confident Tuesday that members would sign off on the tentative deal. “This contract sets a new standard in the labor movement and raises the bar for all workers,” he asserted in a statement.