The UPS Strike

The two-week strike in August by the Teamsters union against UPS caused nervousness throughout much of the business community -- about the possibility of a new era of labor militancy.

While unionized workers represent only 15% of the US workforce -- down from 35% as recently as 1987 -- some analysts suggest that the UPS strike represented a turning point from which organized labor will begin a major resurgence.

For a clear and authoritative perspective on the new labor situation, Bottom Line/Business interviewed two of our experts -- management-employment lawyer Stephen J. Cabot and labor economist Audrey Freed man.

The UPS settlement is certainly the biggest that organized labor has had in many years. But the benefits will be short-lived.

Thanks to organized labor's very effective public relations effort, the strikers were able to obtain favorable attention from the media and general support from the public.

But the public's perception will change over time as controversy about Teamsters' president Ron. Carey heats up.

Questions about the legitimacy of Carey's election and campaign financing were obviously known to the union but were kept quiet until after the strike. In six months or so, people will again be talking about mob connections, etc.

As to the strike itself, the great union victory that was pronounced in the press was not great at all. Carey had promised he would never commit his union for more than a three-year contract, yet he gave UPS a five-year deal.

only an average of 3% a year -- a minimum figure in the current negotiating climate in which many companies arc willing to go to 3.5% or even 4% to get long-term contracts.

Key: UPS was never going to give in on the central issue of hiring increasing numbers of part-time workers -- and it didn't. Its industry is growing so fast that it can easily turn some workers into full-timers. It will still hire more part-timers and may even have a larger percentage of them in five years.

Even if there were no union, the company was destined to pay part -- market is very tight in today's strong economy, and UPS needs the kind of quality people who generally work longer hours than the typical part-timer.

Bottom line: Most companies use part-timers. Most labor con-tracts allow for the hiring of part-timers. And many people today are looking for decent part-time jobs. Nobody's putting a gun to anybody's head to work pan-time for UPS or any other firm.

My guess: If those part-timers were offered the chance to become full-time workers, as many as half-men and women -- would turn it down for a wide variety of reasons. It is a personal issue, not a legal issue or a humanitarian.

So-the union took a red herring and created a populist appeal.

Short term: I think that unions will get a short-term benefit out of the strike. I've seen it already in more active union organizing during August and early September, which is normally die slow season for labor activity.

So-I'm urging clients to be prepared. Expect unions to be more assertive and aggressive in both organizing and negotiations. Make sure you dot the is and cross the t's in union contracts...communicate effectively with employees...and treat employees as they deserve 10 be treated -- as valuable assets -- so they don't feel the need to join a union to get a better deal.


The biggest impact really has nothing to do with the union. Shippers will now be wary of dealing exclusively with UPS. That wariness creates opportunities for other delivery companies to begin to nibble at the edges of UPS's very large apple.

On the labor issues, this is always the time of year when a great bragging noise comes from the AFL-CIO.

Of course, the AFL-CIO's John Sweeney has a more aggressive mind-set than his predecessor, Lane Kirkland, and he's putting more money into revitalizing labor. But we've been hearing for years about organizing the farm industry, etc.

As for labor's recent success in organizing Las Vegas hotel workers, the union's trust funds -- along with the Mafia-have owned many of the major casinos in Las Vegas for a long time. That's like claiming great success for organizing AFL-CIO headquarters.

As for the issue of part-timers, UPS has about 100,000 of them, and when management agreed to convert 10,000 to full-time positions over five years, it was really not making much of a concession-assuming that UPS continues to grow at a healthy pace. What we're talking about really is UPS's ability to use and schedule its workers with total flexibility.

Part-time is almost a misnomer here. Essential to UPS's success is having the flexibility to have workers do different tasks at different times. UPS has preserved that flexibility.

The union was very effective at putting its own spin on the strike story. We all fell for the term '"pan-time employees," although quite a few of them work more than just part-time.

Important: In a tight labor market, such as the one we have currently, any company that is smart enough to devise a schedule that will attract students, retired people and those who have other jobs has an advantage.

Question: How much flexibility did UPS lose in the settlement? Answer: Not very much.

Concerning the long-term impact on the future of labor, most businesses can relax.

The AFL-CIO, under its forceful leader, John Sweeney, succeeded in signing up some government workers and small numbers in related areas where organizing has recently been somewhat successful, such as at public hospitals and HMOs.

But -- the loss of union members is extremely heavy in the private sector and has been for some time. So I think organized labor probably either will continue to stagnate or begin to decline.

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