UPS has withdrawn its voluntary driver buyout program in 13 states amid pushback from dozens local branches of the Teamsters.
The logistics giant rolled back the separation program after 37 Teamsters’ local unions filed grievances against it for violating their national master contract agreement signed and ratified in 2023, alongside the supplemental agreement for employees in the Teamsters Central Region, according to the union.
“Teamster local unions in the Central Region have raised strong opposition to the Driver Choice Program (DCP) and have demanded that UPS not offer the DCP to drivers. We do not agree with the union’s position,” a UPS spokesperson said in a statement. “We believe the DCP complies with our contract, and it has been well-received by our U.S. drivers around the country.”
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The Teamsters Central Region comprises more than 68,000 UPS workers based out of Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
According to the spokesperson, UPS had engaged in discussions with the local unions in the region regarding driver participation in the buyout program. Those conversations are still ongoing in some areas.
The buyout program remains in place for union members in the remaining states across the U.S.
UPS rolled out the DCP nationally last month as the company sought additional means to reduce headcount by up to 30,000 employees in 2026. The courier is tightening its belt as it weans itself off Amazon, its largest customer, through the summer. By July, UPS expects to have 50 percent fewer Amazon packages in its network than it did at the start of 2025.
The delivery giant initially paused the rollout of the program after the Teamsters filed suit against the company in early February. The union alleged the DCP violated six articles of the national master contract and requested an injunction to block the plan.
A federal judge shot down the labor group’s complaint, saying the dispute surrounding the driver buyouts should instead be decided via arbitration.
Under the program, full‑time U.S. drivers can opt to leave their job and get a $150,000 separation payment, in addition to any retirement benefits earned over their tenure, including pension and healthcare.
Approximately 105,000 Teamsters-represented drivers nationwide were eligible for the program before the pullback from the central U.S. states.
The window to enroll in the DCP ended March 12, with the buyouts set to begin April 26. Counsel for the logistics provider estimated that more than 3,000 employees eligible for the DCP were likely to take the buyout.
The Teamsters have contended that the program is illegal, saying that language in the national and regional contracts restricts UPS from directly offering incentive programs that are not voted on and approved by employees and the union.
“By pulling out of more than a dozen states, UPS has conceded that its buyout programs are illegal. They are scams designed to fuel corporate greed. These programs violate the Teamsters contract and UPS knows it,” said Teamsters general president Sean O’Brien in a statement. “The Teamsters strongly urge UPS to take the next right step and dismantle its Driver Choice Program across the country.”
O’Brien said that the Teamsters will pursue arbitration “if UPS fails to do right” by the employees.
Last month, UPS said the DCP rollout was 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.
UPS first announced the voluntary separation program in a January earnings call, making it the second year in a row that the company implemented such a program. Grievances over contract violations of last year’s program are expected to be heard before an arbitrator in May, the Teamsters said.
