United Parcel Service (UPS) is one of the world’s leading courier companies. UPS has been very successful on a yearly basis and employs 360,000 employees within the USA. The International Brotherhood of Teamsters (IBT) has represented 240,000 full and part-time UPS workers for several years. Labor relations between Teamsters and UPS has been challenging throughout the years. Labor problems and heated negotiations between the two parties are ongoing and are usually intensified when labor contracts have to be negotiated.
Teamsters’ concerns regarding the contracts include job security, benefits and working conditions. The solution and implementation to solve these labor problems are discussed. UPS’s main competitor, Fed-ex is also highlighted to show how companies within the same industry deal with their own labor relations and issues. Throughout the years UPS and Teamsters have had several labor negotiations and we have decided to focus not only on their most current labor issues but also reflect on what has happened in the past.
The time period which has been influential in the labor paths of UPS and Teamsters is the 10 year period between 1997 and 2007. The transition made between UPS and Teamsters’ relationship within the last 10 years is discussed/shown below. 1997 to 2002 On August 4th, 1997, 185, 000 UPS workers walked off their jobs as Teamsters and UPS management failed to reach a settlement on the new labor contract which was to replace the old contract which expired on June 30th, 1997. This was the first strike for the company in its 90 years of operation.
Both the union and management were accusing each other of being inflexible in the terms negotiated under the contract. The labor issues which were being negotiated were as follows. The labor issues stated above show that Teamsters strived to achieve efficiency, equity and voice through collective bargaining. According to Budd, “Equity in the employment relationship is a set of fair labor standards that respect human dignity and liberty and include both material outcomes and personal treatment. “1 The labor issue which was the most pertinent for Teamsters was the increase in full-time jobs for employees.
This push from Teamsters to have UPS institute more full-time employees highlights the notion of job security. Job security is defined as, “a worker’s sense of having continuity of employment resulting from the possession of special skills, seniority, or protection provided in a collective agreement against unforeseen technological change. “2 Teamsters was well aware that part-time workers compared to full-time workers received fewer benefits and wages and there was no guarantee of job security.
Part time employees earned $11/hr compared to full-time employees who earned $20/hr and approximately $50,000 a year with overtime. Teamsters decided to strike since it was not coming to collective terms with management on the labor issues above. This particular strike by UPS workers was very influential as it had an economic and social impact on the company and also the entire country. For UPS, the strike was costing the company approximately, “$5 million a day in business lost to competitors such as Federal Express Corp. and the U. S. Postal Service.”
The strike also had a major effect on thousands of large and small businesses who had to lay off workers due to the ripple effect of the strike. Even though Teamsters decided to strike they also had to pay $10 million a week in strike benefits to employees. As a result of the millions of dollars to be paid in strike benefits, the Teamsters’ strike fund eventually became empty. The leader of the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) unions, John Sweeney, made an announcement that they would loan Teamsters any funds they needed until the strike was over.
According to Sweeney, “the UPS strike is our strike, their struggle is our struggle. “4 This was a pivotal decision which reflected the powerful voice of unions. According to Budd, “voice is the ability to have meaningful input into decisions. “5 Teamsters’ voice was intensified by the AFL-CIO’s financial backing of the strike fund. UPS management would have realized that they were not only in a labor battle with 185,000 UPS workers but also millions of AFL-CIO unionists.