A federal judge has given UPS the go-ahead to roll out its second driver buyout program in two years upon dismissing a request from the Teamsters to block its implementation.
Chief district judge Denise James said in a 12-page order that the labor dispute favors arbitration rather than an injunction of the voluntary separation program, and did not meet the legal standard required for the court to stop the plan from being implemented.
“The union has failed to demonstrate that this is one of the rare cases warranting issuance of a labor injunction,” Casper said in the opinion, released Friday. “The union also has not made the required showing that the traditional elements of injunctive relief are met. The union must demonstrate that the likelihood of success on the merits, irreparable harm, balance of hardships and public interest support issuance of an injunction.”
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The Teamsters had alleged that the union faced irreparable harm without an immediate pause to the program because workers can accept the buyouts and exit the company before arbitration is resolved.
Conversely, UPS maintained that a delay in implementing the Driver Choice Program (DCP) may cause the company to rely more upon attrition and involuntary layoffs to reduce headcount and prevent eligible employees from being able to participate.
Judge James favored UPS in this argument since the program was voluntary.
“This, in the court’s view, differentiates this case from those situations where a union sought to enjoin an employer action that would inevitably result in involuntary employment loss,” the opinion read.
UPS first unveiled it would offer full-time drivers a voluntary buyout during a January earnings call, saying it would help the company reach its goal to reduce up to 30,000 employees. Approximately 105,000 drivers across the U.S. would be eligible for the program.
The logistics giant is cutting staff as it nears the completion of its 18-month goal to reduce the volume of Amazon packages in its network by 50 percent.
The courier first engaged with the Teamsters on the proposed DCP on Jan. 8. Upon reviewing terms of the program, the union informed UPS that it believed the DCP violated the national master contract agreed to between both parties in 2023, largely on claims that it could not be implemented without the labor group’s consent.
The Teamsters filed their complaint with the Massachusetts District Court on Feb. 9, leading UPS to halt the rollout of the program. The delivery company called on the court to dismiss the suit on Feb. 13.
UPS said it was pleased with the court’s ruling and intends to move forward with the DCP as originally planned.
“Under the program, our full‑time U.S. drivers will have the choice to voluntarily leave UPS with a $150,000 separation payment, in addition to any retirement benefits earned, including pension and healthcare,” according to a company spokesperson.
UPS will share details about the DCP with its drivers over the coming days, the spokesperson said. The company has not stated whether the enrollment window has shifted due to temporary pausing of the program.
Initially, UPS said the drivers could apply to take a voluntary buyout from Feb. 13 to March 12, with separations beginning April 26.
Earlier this month, the company said the DCP rollout and offer period were timed for February and March to provide better clarity on the firm’s staffing by the second quarter. This would better enable UPS to process employee resignations under the program in April.
In the opinion, Judge James also focused on the role arbitration can play in the labor dispute. While the Teamsters called arbitration a “hollow formality” without an injunction taking place, the court agreed with UPS that the union’s interpretation of their five-year contract is flawed.
“Any contract UPS enters into with a covered employee that ‘in any way conflicts with’ the [master contract] ‘shall be null and void,’” the order said. “The court is not persuaded that an arbitrator would be powerless to determine that a release executed by a bargaining unit employee was invalid.”
The court asserted throughout the order that an arbitrator would have the authority to reverse certain decisions that UPS claims would have brought the company “irreparable harm” such as reinstating employees and awarding backpay.
For example, while the logistics provider’s counsel claimed that more than 3,000 employees eligible for the DCP were likely to take the buyout, the size of the cuts would not impact an arbitrator’s authority to remedy the harm done.
Citing the decision in a prior labor dispute, James said “although the particular remedy ‘would be complex and difficult, there [was] nothing to indicate that the arbitrator would not have the authority or the ability to see it through.”
