Sean O’Brien was rallying a crowd of union members in Los Angeles last week to prepare them for a possible United Parcel Service Inc. strike, when the tides turned with a single phone call.
(Bloomberg) — Sean O’Brien was rallying a crowd of union members in Los Angeles last week to prepare them for a possible United Parcel Service Inc. strike, when the tides turned with a single phone call.
Moments after the Teamsters leader stepped off the stage, a UPS representative reached out to say the company wanted to resume negotiations that had fallen apart on July 5. O’Brien asked for a new proposal by email, and decided it was enough to restart talks.
The two sides met Tuesday morning in Washington. Within hours, a deal was done.
“We put a lot of pressure on them in the media, we put a lot of pressure on them in the street and we weren’t going to reach out to them,” O’Brien said in an interview after announcing the tentative agreement. “They blinked.”
The deal ahead of a July 31 contract deadline averted a strike that could have crippled the US shipping economy and affected more than 340,000 union members. It will provide $30 billion in new money over a five-year span, according to the Teamsters, helping to ease labor tensions at a time workers across several key industries are pushing for better pay and conditions.
For O’Brien, the pugnacious leader who took the helm of the Teamsters last year, the agreement vindicated a strategy of using tight deadlines, leaning on “rank-and-file” workers for advice, keeping union members informed of the talks’ progress and leveraging member anger to present a real threat of a strike.
By his telling, the deal came together at the Capitol Hill Hotel in Washington, where a small group of negotiators from both sides sat down in a conference room shortly after 7:30 a.m. Tuesday. After UPS sweetened the offer the company had sent by email, O’Brien accepted it and brought it back to his team of about 100 or so at the union’s headquarters only a short walk away.
The union’s bargaining group, which included about 40 current UPS union workers, agreed they had extracted as much from UPS as they could, O’Brien said.
A UPS spokesperson declined to comment on the details of the talks. In a statement Tuesday, Chief Executive Officer Carol Tomé said the 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, serve our customers and keep our business strong.”
Reaching an agreement was pivotal for Atlanta-based UPS to avoid a potentially devastating strike that would have hurt its customers and reputation. Tomé, who took over as CEO in 2020 and steered the company successfully through the pandemic, had pledged to get a labor contract before the deadline.
President Joe Biden praised the agreement on a call with Tomé and O’Brien, pointing to it as evidence that collective bargaining works, according to the White House.
Revisiting Plan
To secure the deal, O’Brien turned to strategies he had planned from when he was a top negotiator to renew the 2018 UPS contract. That was upended when he was fired in September 2017 by James P. Hoffa, who had been president of the union for almost two decades.
That 2018 contract, which created a new category of driver that got paid less and worked weekends, was rejected by a majority of Teamsters but was ratified anyway after Hoffa used a technicality in union voting rules. O’Brien tapped into anger over that deal to successfully campaign for Teamsters president, beating out Hoffa’s hand-picked candidate.
Since taking over as president in March 2022, O’Brien has been in campaign mode, urging his members to save up money “to put UPS on the street,” a favorite saying of his. He vowed to eliminate the new category of lower-paid drivers and to boost wages for part-timers above $20 an hour, among other pledges.
He kept those promises in the new agreement and scored other wins, such as gaining a commitment from UPS to put air conditioning on new delivery vehicles and adding a paid holiday.
His movement was helped in part by timing. The pandemic created a renewed appreciation for so-called essential workers for keeping the economy rolling even as the virus threatened their health. UPS earned $22 billion of adjusted net income in 2021 and 2022, and O’Brien was vocal that he wanted a chunk of those profits to fill his members’ pockets. And workers in general have been angered as inflation eats into wages, while a tight labor market has emboldened them to leave undesirable jobs.
“In the last couple of years, most of these factors have moved in a direction that gives labor greater bargaining power than they have had in decades,” Paul Clark, a professor at Penn State University’s School of Labor and Employment Relations, said in an emailed response to questions. “Union leaders understand this is a moment in time for them to make up for lost ground.”
‘Tears of Joy’
The next step is selling the tentative UPS agreement to union members, who will vote on the deal from Aug. 3 to Aug. 22. It’s a slam dunk for Anthony Goytia, a part-time worker in Los Angeles who makes $17.85 an hour. His pay would immediately jump to $21 an hour under the deal and likely go even higher because of his eight-year tenure at the company.
“I was crying tears of joy,” Goytia, whose wife seeks assistance from food banks to ease their financial burden, said in a telephone interview after the tentative agreement was announced. “I won’t have to put off one bill to pay for the next bill.”
O’Brien now has his sights set on organizing other warehouse workers, including at Amazon.com Inc. and FedEx Corp. The UPS contract will be a model to help the Teamsters win converts, he said.
“We are going to try to organize not just Amazon, but anybody doing this type of work,” he said. “This is what you get when you work under a collective bargaining agreement. You get guaranteed wages, you get pensions, you get better working conditions, but most importantly you get dignity and respect.”
Amazon has urged employees to reject unions and is contesting a vote by its workers at a New York warehouse to unionize. The online retail giant says it already offers many of the job perks unions typically seek. O’Brien claims the tactics used by Amazon amount to “union busting” and should be regulated.
“A healthy company should share the profits and should share the wealth” with workers, O’Brien said in a Bloomberg TV interview on Wednesday.
–With assistance from Tom Keene and Lisa Abramowicz.
(Adds O’Brien comment from Bloomberg TV interview in final paragraph.)
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