United Parcel Service and the International Brotherhood of Teamsters have come to terms on a settlement that restricts the number of severance offers the company can make to drivers under its Driver Choice Program. The agreement sets the cap at 7,500 drivers and specifies an early retirement offer of $150,000 for those who take the package.
The union contested the Driver Choice Program, saying UPS implemented the initiative without negotiating with the union and that doing so violated provisions of the 2023 labor contract. According to the union’s position, the contract broadly bars UPS from entering into individual agreements directly with drivers that would circumvent collectively bargained terms.
UPS first announced in January that it intended to reduce headcount by as many as 30,000 employees this year and to close 24 facilities. The company framed those moves as part of an effort to shift away from handling millions of deliveries for its largest customer, Amazon.com, which the company describes as low-profit business.
The settlement with the Teamsters limits the number of workers who can accept the early-retirement offer under the Driver Choice Program to 7,500, and it fixes the amount of the voluntary severance payment at $150,000. The union had sought to block the program on the grounds that the employer did not negotiate about it, citing the labor contract’s restrictions on unilateral individual arrangements with drivers.
This agreement resolves the immediate dispute over the Driver Choice Program by setting a numerical ceiling on voluntary exits and clarifying the size of the retirement offer available to eligible drivers. It follows the company’s January announcement of large-scale job reductions and facility closures tied to a strategic shift in its parcel mix.
Context and implications - The settlement addresses a narrow but consequential disagreement about how UPS may offer individual departure incentives to drivers under a collective-bargaining framework. It leaves intact the company’s broader plans announced in January to reduce its workforce and rationalize its facility footprint as it moves away from low-margin volumes.