Problem
Background
The United Parcel Service (UPS) is a US messengerial company founded in 1907, which evolved into becoming one of today's largest global provider of package delivery and logistic services as well as specialized transport.
A major business strategy of this company was to hire mostly part-time workers, which was quite attractive to young workers. The latter was provided work at off-time shifts earning union-negotiated wages and benefits. However, part-time work at UPS presented very little chances of job advancement regardless of the length of time rendered as a short-term contract worker.
By 1996, UPS's workforce comprised 182,000 part-time workers, working an average of 26-28 hours per week spanning durations of five years that could be more or less at part-time compensation rates. The Teamster Union, handling the bargaining negotiations for UPS worker- members, made a careful study of this particular issue and decided to launch a major offensive strike against UPS. They were, at the same time, banking on public support for their cause.
The Negotiation Plan and Strategy
Union negotiators and UPS union members carefully researched the statutory rights of part-time workers and what the UPS-Teamster Union contract contained. They analyzed the ratios and proportions related to part-time workers versus full-time employees, including disparities in salaries, retirement fund benefits and limited opportunities for full-time hiring. They proceeded in building-up a campaign platform that manifested the imbalance of economic conditions between part-time and full-time UPS workers.
In presenting a clearer picture of how UPS exploits the hiring of part-time workers to cut on costs and employer obligations mandated by the federal government in maintaining regularemployees, he Teamster Union and UPS union members' call for strikes were able to garner workers' support and of that of the international union organizations.
E-mails about the planned strike were sent out, thus enabling UPS workers to understand the causes for which the unions would call a work-stoppage. This enabled them to save and financially prepare for the temporary job loss.
The international labor union was able to set up funds to augment the union-workers' strike fund in case it became depleted during the process of long-term negotiations.
The Negotiations
Hence, the union negotiators were able to come up with a definitive list of their demands and arguments, for which the main agenda was the creation of full-time jobs for part-time workers, reduction of the salary differential between part-time and full-time workers, job security against outsourcing and improvement of work safety conditions.
As an example of the union's preparedness, a UPS concessionary offer of sub-contracting big-rig driver jobs, instead of hiring on a part time status, was immediately rejected by the union team. This only meant delimiting job positions available for advancement of full-time drivers. The union team was able to defeat this counter-bargain by pointing out that the union-UPS contract contained provisions that sub-contracting could only be allowed if the union would agree to this.
The Results of the Negotiation
In no time, a successful bargaining agreement was reached, which included the following settlements among many others:
Ten thousand part-time jobs were converted into full-time occupations at UPS.
Ten thousand job positions available to non-union members and contractors became available to union members.
Union workers became eligible to perform work modified by technological advancements. Closing the salary gap between part-time and full-time workers, by increasing part-time salary rates from $8.00 to $8.50, and providing salary increases that would aggregate a total of $4.10 per hour over the union's five-year labor contract with UPS.
Replacement of older car fleets with power-steering features and additional ventilations. Prohibition of mandatory overtime for all workers.
Package car drivers working on holidays are guaranteed to receive remuneration for at least eight hours.
Expansion of maternity and paternity leaves as approved under the Family and Medical Leave Act.Prohibition of disciplinary actions against employees involved in on-the-job accidents and injury cases.
These are only some of the successful outcomes of the UPS-Teamster Union famous historic negotiations to end a labor strike that caused UPS million-dollar financial losses as the strike lasted for two weeks. Prior to the 1996 year-end closing, only 40,000 out of the 182,000 part-time employees remained under the short-term status.
Task
A. This was a distributive negotiation. Based on in-class discussion and readings, what are the reasons that this was a distributive situation? What effect did it have on the negotiation?
B. Based on the results, what do you believe were the union's three top priorities in negotiation? Why?
C. The strike lasted for two weeks. What specific pressures may both the union and UPS have felt, inside and outside the company as the strike progressed? Why?
D. The key reasons for the Teamster Union's success is identified as their preparation in advance of the negotiation. In your opinion, how does planning help success in a negotiation? What happens if we don't plan our strategy? Provide specific examples.