UPS’s 11,000 Freight Drivers to Vote on New Deal to Avoid Strike

(Bloomberg) -- United Parcel Service Inc.’s unionized freight drivers will vote next month on a final contract deal from the company after they spurned an earlier offer and raised the risk of a labor disruption.

A second rejection would force a strike of about 11,000 workers, the International Brotherhood of Teamsters said in a statement on its website. The freight drivers, who are separate from UPS’s larger group of parcel workers, will vote on the “last, best and final” contract proposal on Nov. 9 to Nov. 11, the union said. An extension to the current labor agreement ends on Nov. 12.

“While a strike is a last resort, if you reject this final offer from the company there will be no other options,” the Teamsters said in the statement. “While the national negotiating committee makes no recommendation for or against this offer, we have agreed to forward it to you for your acceptance or rejection as the consequences of this decision are yours alone to make.”

UPS fell 1.8 percent to $105.85 at 10:27 a.m. in New York amid a broad market sell-off. The shares are on track for their worst week since February after the company’s earnings report Oct. 24 disappointed investors.

‘Attractive Offer’

The Atlanta-based courier called on freight employees to approve the deal.

“UPS has made an attractive offer we believe should be ratified,” the company said by email. “It is an offer that rewards our employees with wages and benefits at the top of the industry and generously compensates them for their contributions to the success of the company.”

The freight business makes up about a fifth of the UPS’s revenue, but is the least profitable unit with an operating margin of 7.4 percent in the third quarter. That trailed profit margins of 9.5 percent at the parcel division and almost 17 percent for the international operation.

Teamsters negotiators said they tried to address workers’ concern such as more restrictions on subcontracting and pay protections for drivers who perform dock work, but couldn’t reach a revised agreement even though the company gave some concessions. Before calling a strike, union leaders decided to give freight workers the opportunity to vote on the company’s offer.

Freight workers voted 62 percent against the contract proposal in results that were announced on Oct. 5 and turnout was heavy with 66 percent of eligible members casting votes.

A labor contract for UPS’s quarter-million parcel workers was ratified this month by the union leaders even after a majority of workers rejected it. That’s because less than half of eligible members participated and when turnout is that low, Teamsters rules mandate that the agreement can only be rejected with support of at least two thirds of voters.

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