Teamsters Dispute with UPS - Analyst Blog

United Parcel Service Inc. (UPS), the world's largest package delivery company, stated that the National Mediation Board (NMB) has dismissed a bid of Teamsters Local 2727 union to go on a strike against the company in the next 30 days. Teamsters Local 2727 represents approximately 1,400 airline mechanics, who work for United Parcel Service.
 
Teamsters asked NMB to declare the ongoing negotiations for the new contract to be stalemate, failing which the strike will not be called off. However, if NMB declares the proposed deadlock, the company and Teamsters will commence a new round of negotiations. The union started bargaining with United Parcel Service for more than three years, but did not reach any settlement since 2006.
 
Teamsters stated that the company had made large profits since 2006, but has neither met the union demands for job security nor for the protection of health and insurance benefits. On the other hand, the company believes the union's request to have the deal declared stalemated is a policy to put pressure on negotiations.
 
However, management expects an agreement to be reached through the ongoing negotiations between the union and the company. United Parcel Service stated that it has been in the process of negotiations for more than three years and intends to reward the airline mechanics for their contributions to the company with improved contract terms. Besides, management believes the new contract terms will provide the unions with long-term security.

Out of total 408,000 employees, United Parcel has 254,000 employees under Teamsters union governed by the National Labor Relations Act (NLRA). The employees of its major rivals, FedEx Express, a unit of FedEx Corporation (FDX) are governed by the Railway Labor Act (RLA). FedEx has only 90,000 employees, which are treated as airline workers.
 
FedEx stated that its express drivers are primary to both an airline operation and an express delivery network and will be treated as airline and railroad employees. UPS argues that the drivers and other employees doing similar work will be governed by the same labor law and urges the Congress to put FedEx Express non-airline employees under the same law as UPS drivers.