The Teamsters union on Monday asked a federal court to stop UPS from initiating a second voluntary buyout program for package car drivers, saying the effort to eliminate jobs violates their national contract.
Chief Financial Officer Brian Dykes told analysts during the company’s Jan. 27 quarterly earnings call that UPS (NYSE: UPS) was planning a second voluntary buyout program for delivery drivers as part of an effort to save $3 billion by cutting an additional 30,000 frontline jobs and two dozen facilities.
UPS has notified the union it intends to announce a voluntary separation program, called Driver Choice, this week, the Teamsters said in a news release.
The union, which represents about 338,000 drivers, filed an emergency motion for a temporary restraining order against UPS in the US. District Court in Massachusetts. The filing detailed at least six alleged violations of the national master contract by UPS in the rollout of the buyout program, including direct dealing with workers over new contracts and eliminating jobs when obligated to create more positions.
The Teamsters argue the Driver Choice Program violates the union contract because it wasn’t negotiated and any program that changes the terms of employment, such as compensation and separation, must be bargained with the union.
It claims that UPS since late January has not responded to dozens of requests for information and documents related to its plan for a follow-on driver buyout.
UPS said it has been engaged with the Teamsters on a voluntary separation plan since early January and didn’t spring any surprise on the union last week.
“We are aware of the Teamsters’ response to the voluntary separation program we planned to offer our U.S. full-time drivers and are working to resolve the matter through the legal process. This does not affect our operations, and we will continue to provide the reliable service our customers expect from UPS,” said Genny Bowman, vice president of communications, in a statement to FreightWaves.
“The world is changing, and the rate of change is accelerating. As we navigate these changes and continue to reshape our network, our drivers appreciate having choices, including the option to make a career change or retire earlier than planned. We engaged with the Teamsters on this topic in early January. We are disappointed the Teamsters have chosen to oppose a program that is entirely voluntary and would provide a great benefit to our employees, particularly as we continue to right-size our workforce,” the statement said.
The Teamsters loudly objected last summer when UPS for the first time ever offered early retirement to delivery drivers, saying the contract requires the Atlanta-based company to create 30,000 full-time jobs under a five-year contract ratified in August 2023 and that the payment was too low compared to what drivers can earn in wages, health care and guaranteed retirement benefits. It urged members to reject UPS’s lump-sum payment offer.
Turnout for the program was low. Under last year’s package, a driver with 27 years of service received a $48,000 payout. About 2,000 drivers took the UPS offer,according to an estimate by industry expert Satish Jindel, the president of ShipMatrix. The average driver likely received about $86,400 when benefits worth 20% of the cash benefit are added, according to calculations by Jindel.
The scope of UPS’s updated buyout program is much broader than the payoff presented to workers late last summer, when UPS targeted payouts to more tenured drivers nearing retirement, according to the Teamsters. The Driver Choice Program, as stated in the lawsuit, would be offered to all drivers at UPS regardless of length of service. Drivers who accept the offer must commit to never work for UPS again and to waive their rights to union representation in the event grievances arise over execution of the agreement, the union said.
“For the second time in six months, UPS has proven it doesn’t care about the law, has no respect for its contract with the Teamsters, and is determined to try to screw our members out of their hard-earned money,” said Teamsters General President Sean M. O’Brien. “If [CEO] Carol Tomé has buyer’s remorse for the historic, legally binding contract she signed with rank-and-file Teamsters, that’s her problem. Our union will not allow UPS to inflate its earnings reports on the backs of Teamsters families. We’ve given too much to grow and sustain this company, and we will not be sold short. UPS must dismantle its illegal buyout program and resolve its contract violations in the courts, or the Teamsters will see this greedy corporation in the streets.”
In 2025, UPS eliminated 48,000 operational jobs and closed 93 leased and owned distribution centers as part of a multi-year network consolidation spurred by a planned 50% drawdown in less lucrative business with Amazon, slower demand related to new import tariffs on e-commerce goods and automation investments designed to improve sorting efficiency.
Critics say that the Amazon business is no longer as profitable because the new Teamster contract significantly increased UPS’s cost base.
Multiple Teamsters local unions have filed grievances against UPS over the contract violations associated with last year’s voluntary separation program, the Teamsters said. Those grievances are expected to enter binding arbitration next month following a National Grievance Committee hearing between the union and the company.
In its motions before the court on Monday, the Teamsters requested an injunction to prevent the rollout of UPS’s Driver Choice Program and a stay on further action by the company to offer such incentive programs until an arbitrator’s ruling on the pending grievances related to last year’s buyout.
“If UPS is allowed to move forward with this illegal program, it would cause irrevocable harm to our union and a majority of our hardworking members. The Teamsters Union ensured our members rejected UPS’s insulting payoff last year. Unfortunately, UPS continues to reach new levels of greed and corruption that require our fight to continue,” said General Secretary-Treasurer Fred Zuckerman.
UPS had fourth-quarter revenue of $24.5 billion, down 3.2% year over year, with average domestic daily package volume down 8.6%. Adjusted operating profit came in at $2.9 billion for the fourth quarter, off by 6.8% from the prior year.
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Write to Eric Kulisch at ekulisch@freightwaves.com.
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