An arbitrator has ruled that UPS must live up to its contract agreement with the Teamsters to create 2,000 new full-time jobs.
The arbitrator ordered the jobs be created within 90 days, and required the company to pay more than $80 million in back wages with benefits to some part-time workers. The Teamsters say it is the largest award in the union's history.
The contract was agreed on after the Teamsters union went on a 16-day strike in 1997. It calls for UPS to create 10,000 full-time jobs, 2,000 in each year of the five-year agreement. Company officials refused to create the new positions in the first two years of the contract, claiming a reduction in package flow following the strike.
Independent arbitrator George Nicolau agreed with UPS that after the Teamsters strike, the company did in fact suffer a decline in volume through the next year. He also found there was an increase in layoffs. However, he concluded the volume decline and subsequent layoffs were not sufficient to trigger cancellation of the job-creation clause.
In 1999, under pressure from the union, UPS announced the creation of 2,000 new full-time jobs called for in the third year of the contract. This arbitration agreement covers the first year of the contract. The Teamsters have a grievance pending for the jobs called for in the second year of the contract.
The new jobs will move part-time employees into full-time positions. A key complaint leading to the 1997 strike was the issue of part-time vs. full-time employees.
In a statement, UPS said it "is committed to the arbitration process and is prepared to begin creating the new jobs." The company said it plans to immediately meet with Teamsters officials to determine the next appropriate steps, and also to discuss the issue of full-time jobs under Year 2 of the agreement.