UPS and the Teamsters have settled their differences over the implementation of a driver buyout program, with both parties agreeing to cap the voluntary plan to 7,500 drivers nationwide.
In late March, the logistics giant had previously rescinded the program from 13 states in the central U.S. amid contention from dozens of the union’s local branches. The union had maintained that the program violated the five-year national master contract agreed upon between the parties in 2023.
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Under the Driver Choice Program (DCP), UPS employees can opt to receive a $150,000 payment to accept early retirement from the company. The severance package would also include retirement benefits earned over their tenure, including pension and healthcare.
“This outcome aligns with our objective to provide all U.S. drivers with options as we continue to reconfigure our network,” said UPS in a statement. “The DCP has been well received by our employees, with strong interest across the country. Applications will be approved based on seniority and the needs of the business, as originally planned.”
According to the Teamsters, the offers will be made to long-haul feeder drivers and regular package car drivers based on seniority in all regions of the country.
The DCP is a lever being pulled by UPS to help the courier shed as many as 30,000 jobs in 2026. The company already cut 48,000 jobs last year as it focuses on more profitable delivery operations and aims to cut costs across its domestic warehousing network.
UPS is currently in the final stages of scaling down its Amazon volumes by 50 percent by the second half of the year, reducing reliance on its largest customer. The plan, first announced in January 2025, is expected to save $3 billion for the Atlanta-based delivery firm.
After the conclusion of the DCP, UPS has agreed not to pursue or offer any other severance programs for the life of the current national contract, which does not expire until July 31, 2028.
The union had sought an injunction of the voluntary buyout in February, but the court ordered that the labor dispute instead goes to arbitration.
The Teamsters still claim that UPS never had the contractual right to offer driver buyouts, with the labor group and more than 30 of its local branches filing grievances after the program’s announcement. The union has argued that contract language restricts UPS from directly offering incentive programs that are not voted on and approved by employees and the union.
“With enough pressure and member solidarity, UPS finally did the right thing by putting its commitments to hardworking Teamsters down in writing,” said Teamsters president Sean O’Brien in a statement. “Lifelong Teamsters who have given so much of themselves to making UPS the king of parcel delivery will have the right of first refusal on any severance agreements. Union seniority and the rights of all our members will be honored. UPS will no longer have the chance to go around the union without giving Teamsters the respect they deserve at the bargaining table.”
Roughly 105,000 Teamsters-represented drivers are eligible for the program. Legal counsel for the Teamsters had estimated that more than 3,000 employees were likely to take the buyout.
NLRB orders Amazon to bargain with Staten Island union
Alongside the Teamsters’ win, an affiliate of the 1.3-million-member union got a victory of their own against Amazon, pushing the e-commerce giant further to the bargaining table.
The National Labor Relations Board (NLRB) ruled Wednesday that Amazon must negotiate with the Amazon Labor Union (ALU), which represents about 5,000 employees across the e-commerce giant’s warehouse in Staten Island, N.Y..
According to the NLRB, Amazon has engaged in unfair labor practices by refusing to bargain with the ALU. The union initially filed a complaint with the board in January 2023, weeks after the NLRB certified the labor group.
Employees at the “JFK8” facility in Staten Island became the first U.S.-based Amazon workers to unionize in April 2022, but the tech titan has never recognized the union. As such, the company has long avoided any negotiation over wages and working conditions.
Two years later, after making very little headway as an independent labor group, the ALU affiliated with the Teamsters.
Amazon said on Thursday it disagreed with the NLRB’s ruling.
“The truth is that both the Amazon Labor Union and representatives of the NLRB improperly influenced this election,” said an Amazon spokesperson in a statement, with the company planning to appeal. “We’re confident an unbiased court will overturn the original certification, and we look forward to the opportunity for our team to fairly voice their opinions.”
The spokesperson said Amazon employees have the choice of whether to join a union.
During the appeals process, Amazon likely would not have to comply with the NLRB’s order while it makes its way through the courts.
“Amazon’s strategy these last few years has been to delay, delay, delay—and the NLRB confirmed it because the law is not on their side,” said Randy Korgan, director of the Teamsters’ Amazon division, in a statement.
The NLRB and Amazon have had an ongoing feud as unionization efforts across the company have popped up.
In a separate complaint filed in September 2024, the Seattle-based Big Tech firm alleged that the NLRB improperly influenced the 2022 Staten Island election, and said the board’s structure was unconstitutional. That suit is still pending.
