UPS United Parcel Service

By Paul Ziobro 

United Parcel Service Inc. and the Teamsters union are discussing a two-tier wage system that would allow the company to hire lower-paid workers to deliver packages on weekends, including Sundays, as the parcel giant seeks ways to manage the surge in e-commerce.

The proposal, raised in recent contract negotiations, calls for creating a "hybrid driver" position that would earn as little as $15 an hour and top out at an hourly wage of $30. These employees' regular schedule would be Sunday to Thursday or Tuesday to Saturday, avoiding costly overtime.

Under the current contract, most package-truck drivers work Monday to Friday shifts and earn higher wages on weekends. The union says they are entitled to double-time wages in some areas for working on a Sunday, or hourly rates of nearly $74.

The hybrid driver role would allow UPS to start regular Sunday delivery of packages, a service the U.S. Postal Service provides for customers such as Amazon.com Inc. UPS started Saturday package delivery in some markets in 2017 but hasn't disclosed any plans to start delivering on Sundays.

A Teamsters spokeswoman said the proposals between the union and UPS were part of the negotiating process and the two sides hadn't come to any agreement about hybrid drivers. A UPS spokesman on Tuesday declined to comment on contract negotiations.

The two sides are negotiating one of the largest collective bargaining agreements in the U.S., covering about 280,000 UPS employees. UPS, which has about 454,000 workers world-wide, is trying to complete a new contract before a five-year agreement expires on July 31. UPS Chief Executive Officer David Abney said recently he was confident the two sides would reach an agreement in time.

The hybrid-driver idea has inflamed divisions within the Teamsters, including a faction opposed to the current union leadership, including President James P. Hoffa.

Last week, Denis Taylor, director of the Teamsters package division, removed three members from the negotiating committee, which he is co-chairman of, according to Teamsters United, a group that opposes Mr. Hoffa's leadership. The dismissed committee members opposed the hybrid-driver proposal and said they were removed for revealing the contract proposals to union members.

"They key to negotiations of this scope is educating and mobilizing members," said Matt Taibi, an official at Teamsters Local 251 in Rhode Island, who was removed from the negotiating committee. "Members need to know what it is they're fighting for."

The rift between the Teamsters United and Mr. Hoffa's team runs deep. Mr. Hoffa, the son of the famous labor leader with the same name, narrowly won re-election as the Teamsters general president in 2016 over Fred Zuckerman, who led the Teamsters United ticket. Mr. Zuckerman and other union leaders such as Sean O'Brien, president of Teamsters Local 25 in Boston, have called for more transparency.

"It's unfortunate that these negotiations are some of the most important and it seems like this leadership is focused on adversaries," Mr. O'Brien said in an interview.

The current contract already has positions where workers can cobble together multiple part-time shifts, from loading trucks and sorting packages to clerical work and washing cars, into a full-time position. Such "hybrid" positions are paid a premium to the $10 starting part-time wages, trading up to a better jobs.

Those jobs don't allow workers to deliver packages on the traditional brown boxcar, which is viewed as a premium position in the Teamster ranks, with annual pay typically above $80,000 with generous benefits.

Other issues being negotiated include raising starting wages for part-time workers and reigning in excessive overtime. Company executives last month expressed confidence they would reach an agreement, avoiding the first strike since 1997.

The company, which has been spending heavily to automate its network to handle the surge in e-commerce parcels, has also been taking steps to curb employee costs, offering early buyouts to managers last month and freezing pension plans for 70,000 nonunion staffers last year.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

May 09, 2018 06:14 ET (10:14 GMT)

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